Rome

Higher taxes hurting families, warns consumer groups

Italians spend less on good food, shopping as living costs rise

Higher taxes hurting families, warns consumer groups

Rome, August 28 - Italian families, which are already spending less on nutritious food as incomes fall and expenses increase, cannot afford further tax increases, business and consumer groups warned Wednesday. As national statistics agency Istat warned that retail sales fell by 3% in the first half of this year, consumer groups said families are suffering and any further increases in the IMU property tax or the value-added tax will be disastrous. Italy's fragile coalition government was meeting Wednesday to decide whether to abolish or amend the tax - a decision that will likely influence other taxes as any revenues lost through amending the IMU must be made up elsewhere. But higher consumer taxes will do too much damage to individuals and the economy by driving down consumption even more, leading consumer groups Federconsumatori and Abusdef said in a statement. "The impact of these measures would have disastrous consequences for the entire country and could drag on consumption at year-end," the groups warned. Already, the statistics are grim. Istat said the 3% drop in retail sales over the first six months of 2012 marked the twelfth consecutive annual fall in the figures. It noted that food sales have dropped considerably between May and June 2013 compared with the same period last year. Consumer groups say that in the past two years, consumers spending has dropped by as much as 7.8% - worth about 56 billion euro to the Italian economy. Such losses could drive more and more businesses in bankruptcy and any increase in the sales tax will make matters even worse, said national business group Confesercenti, which represents small and mid-sized enterprises. "It would be a grave mistake," to replace lost IMU revenues with high sales taxes, it warned. Families living on tighter budgets are replacing nutritious food with cheap junk, warned the Italian Farmers Confederation (Cia). Sales of fresh fish have fallen by 16.6%, red meat by 4.4%, fruits and vegetables are down by 3.7% while "junk food" sales are up 7% year over year, said Cia.

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