Italy's governing coalition proposes extending the 33% IRPEF bracket to €60,000, delivering up to €1,000 annual relief for middle‑income earners in the next budget law
Executive summary: The Italian government has signaled it will propose an IRPEF reform in the 2027 budget that raises the 33% tax bracket ceiling from €50,000 to €60,000, granting up to €1,000 in annual tax savings for affected earners. The change would increase disposable income for roughly 8‑10 million taxpayers, potentially boosting consumption, but it also widens the budget deficit and must fit within the EU Stability and Growth Pact limits.
Who is involved: Italian Council of Ministers, Ministry of Economy and Finance, Parliament (Camera dei Deputati and Senate), European Commission (fiscal surveillance).
Likely next: The draft budget law will be presented to Parliament by mid‑September 2026, followed by committee scrutiny and a final vote before year‑end; the European Commission will assess compliance in its autumn 2026 fiscal review.
The Italian majority plans to widen the 33% personal income tax rate, currently capped at €50,000, to cover earnings up to €60,000. If enacted, taxpayers in that band would see a maximum benefit of roughly €1,000 per year. The measure is part of the upcoming legge di Bilancio and still requires parliamentary approval and compliance with EU fiscal rules.
Timeline
- — Manovra, all’ipotesi nuovo taglio Irpef per i redditi fino a 60.000 euro. Benefici fino a 1000 euro (la Repubblica — Economia)
- — Pensioni, i pagamenti di agosto il 1° e il 3. Nel cedolino rimborsi Irpef e verifiche sui redditi (la Repubblica — Economia)
- — Pensioni di agosto, pagamenti più “pesanti” per chi è a credito Irpef. Due date nel calendario (la Repubblica — Economia)
Analysis — what this means
Likely next events
- Draft budget law submitted to Parliament by 15 September 2026
- Parliamentary committee hearings and amendments in October 2026
- Final budget vote scheduled for late December 2026
- European Commission fiscal assessment published November 2026
Sectors affected
- Italian personal income tax (IRPEF) administration
- Household consumption and retail
- Public finance and sovereign debt management
Regulatory implications
- Potential breach of EU Stability and Growth Pact if deficit exceeds 3% of GDP without corrective measures
- May force revision of 2027‑2029 medium‑term fiscal targets
Historical parallels
- 2022 Italian budget introduced a temporary IRPEF cut for incomes up to €50,000, delivering ~€500 relief per taxpayer
- 2019 Conte‑II government reformed IRPEF brackets, lowering the top marginal rate from 43% to 41% for high earners
Key entities
Sources
- Manovra, all’ipotesi nuovo taglio Irpef per i redditi fino a 60.000 euro. Benefici fino a 1000 euro — la Repubblica — Economia
- Pensioni, i pagamenti di agosto il 1° e il 3. Nel cedolino rimborsi Irpef e verifiche sui redditi — la Repubblica — Economia
- Pensioni di agosto, pagamenti più “pesanti” per chi è a credito Irpef. Due date nel calendario — la Repubblica — Economia
Related cases
- Italy’s super bonus for garage purchases ends in 2026, dropping to 36% in 2027, triggering a final surge in real estate-related tax claims before the incentive expires
- Italian government explores €30bn in electoral spending via pre-existing expenditures and tax cuts, raising fiscal deficit concerns
- Italian August pension payouts, coupled with Irpef refunds on payslips, will inject liquidity into retiree households and affect short‑term consumer spending
- Italian taxpayers rush to meet the June 30 deadline for filing the 730 form and paying the 2025 IRPEF balance plus the 2026 advance, with the option to extend via small surcharges