Taxation is not only one of the pillars of modern democracy, but can also be a significant resource for development. This is even truer in our current post-pandemic phase, when governments are being called upon to undertake some major transformational processes.
Italy, which has long awaited reforms capable of ensuring a new and more efficient fiscal pact, is among the economies most vulnerable to the challenge of post-Covid recovery. Efforts to get GDP back on track are today being stymied by the price of energy, a high tax item, while rising inflation calls for greater attention to managing the public debt. These are obstacles that should not obscure the important opportunities offered by the National Recovery and Resilience Plan (PNRR).
In this context, tax reform becomes not only a way of supporting the recovery by continuing the fight against evasion, but also an opportunity to respond to Europe’s urging Italy to increase its economy’s investment appeal.
The first point that any intervention should address is simplification of a tax regimen that currently consists of 800 laws, as a step in a broader evolution toward greater stability and certainty. Another fundamental aspect is progressive taxation: taxation as an occasion for development must also provide leverage for reducing social and territorial inequalities that continue to hinder the country’s growth.
Nevertheless, it is impossible to talk about development without addressing the taxation of businesses. This becomes even more important with a fiscal policy subject to the increasing complexity of the instruments used, starting with those incentives that pursue the aims of industrial policy. Fundamental to that end is having a public administration with a multidisciplinary agility capable of improving relations with taxpayers.
The efficiency and efficacy of a tax system remain associated for the most part with the perception of citizens, businesses and potential foreign investors. Improving that image and making the economy more attractive calls for a long-range vision that ensures that the resources amassed through taxation are allotted to high quality policies capable of leading to the country’s concrete development.