Turin

Industry minister says govt determined to avoid tax hikes

Zanonato says govt will is 'absolute' to avoid IMU and VAT rise

Industry minister says govt determined to avoid tax hikes

Turin, July 15 - Italian Industry Minister Flavio Zanonato on Monday said the government was determined to avoid increases on a controversial property tax called the IMU as well as on Italy's 21% value added tax (VAT). ''The will not to increase the IMU is absolute, and the same is true regarding the IVA,'' Zanonato said on the margins of a meeting to inaugurate construction of a new Italy-France power-line. Zanonato added that government leaders were working to identify financial coverage for public finances to avoid the tax hikes. Italian Premier Enrico Letta earlier this month announced the government's top political priority - to staunch a creeping value-added tax (VAT) and to make cuts in the loathed IMU property tax - will hit significant trouble due to lack of financial coverage and budget restrictions imposed by the European Union. ''The first goal is the most difficult,'' Letta told journalists in Rome on July 4 after a summit held by the parliament majority to establish a roadmap for the current legislature. Capping the VAT and slashing the IMU are ''the most complicated things (on the agenda), because they come with the 2013 budget, which is still rigid and does not enjoy the flexibility'' guaranteed by the decision announced earlier in Brussels, Letta said. On July 3, European Commission President Jose' Barroso announced the EC was allowing ''greater flexibility'' in eurozone countries for public investments, but belt-loosening is not scheduled to begin until 2014, and still does not allow exceeding a 3% budget-deficit limit. ''Coverage must be found completely within the budget, and that is not easy,'' Letta said. Centre-right leader Silvio Berlusconi promised to cancel IMU and pay back last year's take during the campaign for February's general election. Lawmakers belonging to Berlusconi's People of Freedom Party (PdL) have staked their political reputation and support for Italy's unprecedented right-left coalition government on the two tax measures. The property tax had been reinstated by a technical government last year to address a crisis in public finances.

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