Italy may increase VAT rate in 2020 if no alternative is found
The Italian Government is looking for alternatives to avoid rising VAT rates in the beginning of next year. With the goal of reducing the budget deficit as a requirement from the European Commission the VAT rate is expected to increase from 22% to 24.2% in January 2020.
The news was not welcomed by the members of other parties. One stated “VAT won’t increase, period”1 while others said with regret that the VAT hike is a fact unless big cuts are made in public services2.
Besides, according to the Economic and Financial Document (DEF) the deficit will be increased to 2.4% of GDP in 2019 which differs to the one already agreed in the Stability Program (2.1%) which will make even more necessary to find new ways of increasing resources. For the upcoming years the deficit will decrease 0.3% yearly reaching 1.5% deficit by 2022.
As always, Global VAT Compliance will keep you up-to-date with the latest VAT news around Europe and the world.