ROME, Oct. 28 (Xinhua) -- Italian Prime Minister Giorgia Meloni's cabinet on Wednesday approved a draft budget worth about 26 billion euros (29 billion U.S. dollars) for 2027, featuring tax cuts and social support measures.
The package expands the 33-percent income tax bracket to cover annual earnings of up to 55,000 euros, up from the current threshold of 50,000 euros. It also raises the income ceiling for self-employed workers to qualify for a flat-tax regime from 85,000 to 100,000 euros.
Other measures include a 5-percent flat tax rate for new hires under the age of 35 and an annual state contribution of 100 euros for each newborn until the child turns 18.
Meloni said a new levy on the profits of major banks, other lenders and insurance companies was expected to generate about 5 billion euros in revenue.
The budget is the government's final spending plan before general elections scheduled for 2027. The administration faces mounting pressure to tackle the rising cost of living, as trade unions, social organizations and student groups have staged protests in recent weeks.
Economy Minister Giancarlo Giorgetti cited rising raw material costs and borrowing rates as key challenges. However, he said an agreement with European Union authorities allowing a temporary increase in next year's fiscal deficit would provide the government with additional room for spending.
The draft budget will now be submitted to parliament for approval by both chambers before being sent to EU authorities by the end of the year for assessment under the bloc's fiscal rules. (1 euro = 1.11 U.S. dollar)
