ROME, Feb 26 — Italy’s government is looking at closing a tax incentive loophole under which some buyers of government bonds could also become eligible for anti-poverty subsidies, according to a draft decree seen by Reuters.
The move, which comes as the Treasury collects orders for its new ‘BTP Valore’ bond dedicated to small investors, aims to ensure that some welfare policies effectively help “the most vulnerable” rather than the wealthy, the document said.
Italy announced the incentives last year as part of a drive to boost domestic holdings of its huge public debt and limit the impact of any future financial crisis.
The country has long been trying to lure small savers frustrated by low-yielding bank accounts and seeking higher returns for their cash in the face of high inflation.
This year’s budget allows taxpayers to deduct from the ISEE, a household wealth indicator used in means testing, a maximum of €50,000 (RM258,928) in sovereign bonds and investment products for small savers.
Rome’s plans have triggered widespread criticism from opposition parties and academics, who argued the incentives would damage the provision of existing welfare programmes to the poor.
Tweaks under consideration now show that Rome wants to avoid a situation in which some bond buyers’ means-tested assets could fall low enough to make them eligible for the anti-poverty benefits.
The draft, still subject to changes, said the incentives could not apply to recipients of a scheme designed to help poor households with minors, pensioners or disabled people.
Prime Minister Giorgia Meloni’s cabinet is expected to discuss the decree at a meeting officially scheduled for 1430 GMT.
Orders for the BTP Valore bond reached €4.5 billion by 1248 GMT (8.48pm Malaysian time), Milan bourse data showed today. — Reuters
