Tax reform takes the government into campaign mode
Italy’s tax reform is entering its most political phase. After eighteen legislative decrees and the completion of eight consolidated tax codes, the government can claim to have brought greater order to a system built up over decades and often difficult to navigate. But the number of measures now matters less than their results. For families and businesses, the reform will be judged on simpler procedures, clearer rules and, above all, the prospect of paying less tax. This is where fiscal policy begins to overlap with the campaign for the 2027 general election. The centre-right built its reform around the idea of a less confrontational relationship between the state and taxpayers, introducing changes to penalties, the two-year advance tax agreement, cooperative compliance and the reorganisation of tax legislation. Yet it remains difficult to identify a single measure capable of symbolising the entire process. The overall figure is also politically uncomfortable: in 2025, Italy’s tax burden rose from 42.4 to 43.1 per cent of GDP, largely because of higher social security contributions. This does not mean that every tax increased, but it makes it harder to argue that the overall burden has already fallen in a way taxpayers can feel. The next budget law will therefore be decisive. Forza Italia is pushing to extend income tax cuts to the middle class, remove taxes from lower Christmas bonuses and introduce new incentives for young people, families and businesses. The League is likely to continue focusing on tax settlements and unpaid tax bills. Brothers of Italy will have to reconcile these demands with budget constraints and the cautious approach of the Economy Ministry. Rather than a dispute over the broader direction of policy, this is a competition to identify the flagship measure each party can present to voters. The real question is who should benefit from the next round of measures. Employees want to recover purchasing power, the self-employed want to protect the flat-rate regime, and businesses are demanding stability and incentives for investment. Every fiscal choice targets a specific constituency and therefore inevitably becomes an electoral choice as well. It is against this backdrop that President Sergio Mattarella’s warning against «rather premature» electoral tensions takes on particular significance. The election is still some way off, but the parties are already positioning themselves: the electoral reform will reach the Senate in September, the governing coalition is discussing future candidacies, and Senate President Ignazio La Russa has even raised the possibility of Giorgia Meloni eventually moving to the Quirinal Palace. The tax reform therefore marks the transition from the phase of legislative action to the battle for public support. The government has almost completed the regulatory framework; it must now prove that it can produce tangible results. The election campaign has not yet officially begun, but on tax policy it is already under way.
