Italy may increase VAT rate in 2020 if no alternative is found

Apr 24, 2019 | VAT Updates

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.

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