On September 15, the Council of Ministers approved two finance bills 2014-16. Lowering the total fiscal burden from 44.3 down to 43.4 percent in 2016, the government claims that its budget act “is a U-turn” in economic and financial planning of these past few years because it “reduces taxes instead of increasing them.” And, more importantly, it doesn’t “cut social and health spending.” However, employers and unions say the announced cut is “not enough.” The maneuver already amounts to €27.3 billion in 2014-16, €11.6 billion of which in 2014. (Ref. 130630)
Tax cut for workers. The bill provides for the reduction of income tax for employees whose annual gross earnings range between €8,001 and €15,000 and between €15,001 and €55,000. for instance, someone earning €15,001-20,000 will save €152.
Intervention in favor of businesses. The government grants businesses a labor cost cut, limited to €5.6 billion over 3 years, notably via abatement on the regional tax, limited to €40 million, for new permanent recruitments (but only if they effectively increase the workforce), up to €15,000 per new employee.
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