Italy approves 2026 budget with tax hikes, deficit cuts

Italy’s parliament has given final approval to the government’s 2026 budget, aiming to reduce the fiscal deficit to 2.8% of GDP and secure Italy’s exit from the EU’s excessive deficit procedure.

The budget includes €22 billion in tax cuts and spending increases for families, workers, and businesses, but raises taxes on banks, insurers, and financial transactions. A new €2 levy on low-value parcels from non-EU countries is also introduced to protect the domestic fashion industry, News.Az reports, citing Reuters.

Critics warn the budget remains cautious, with Italy’s debt projected at 137.4% of GDP and modest growth targets of 0.7% for 2026, among the lowest in Europe. The measure passed the lower house 216–126 after Senate approval.

News.Az