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Italy’s 2026 Budget Becomes Law After Confidence Vote, With Pension Rules Up for Review

The €22 billion package reflects a restrained, market‑minded push for tax cuts alongside business incentives under strict fiscal limits.

Overview

  • Lawmakers in the Chamber of Deputies approved the budget 216–126 (3 abstentions), giving final parliamentary clearance ahead of publication in the Official Gazette.
  • The House backed a Lega order urging the government to reconsider and potentially suspend the scheduled pension‑age rise, with Economy Minister Giancarlo Giorgetti saying a 2027 increase could be further eased if public‑finance conditions allow.
  • The law trims the second IRPEF bracket to 33% for incomes up to €50,000 and introduces a 5% flat tax on contractual wage increases plus a 1% rate on productivity bonuses.
  • Roughly €3.5 billion is directed to industry in 2026 through Transizione 4.0, hyper‑amortization and the extended ZES Unica for the South, and the government agreed via an FI order to evaluate restoring hyper‑amortization benefits for certain non‑EU (EFTA/G7) goods.
  • The majority secured passage using a confidence vote after overnight orders of the day, drawing opposition complaints about a curtailed process and “austerity,” while the government called the plan responsible and growth‑oriented; additional odg commitments include exploring a youth flat tax and a revival of the incremental flat tax for 2026.