PdL insists raising VAT avoidable

But economy ministry 'mulling tax hike' after IMU deal

PdL insists raising VAT avoidable

Rome, September 18 - The House whip for ex-premier Silvio Berlusconi's center-right People of Freedom (PdL) party on Wednesday called on Premier Enrico Letta to deny the possibility of a hike in value-added tax (VAT) following a government deal to scrap a controversial homeowners' tax known as IMU. "We are certain the premier will honor his commitments," added Renato Brunetta, the architect of the PdL's recent tax initiatives, referring to promises he says Letta made to keep VAT taxes from rising upon the formation of the left-right coalition government in April. According to Italian media Wednesday, the economy ministry was planning to go ahead with a planned hike on the top tier of VAT, from 21% to 22%, starting October 1, as a result of the PdL pressuring the government to follow through on Berlusconi's campaign promise to roll back IMU. "Either we fund the abolition of IMU, or we fund blocking a rise in VAT. Both things are not possibile," economy ministry sources told Italian daily La Repubblica. The remarks followed statements Tuesday from European Monetary and Economic Affairs Commissioner Olli Rehn before an Italian Senate committee, in which he said the government's decision to scrap IMU to appease the PdL "has raised and still raises concern" due to the problem it creates in finding alternative revenue in an already tight budget.

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