ROME (Reuters) – Italy plans to renew corporate tax breaks to support investments in innovation and widen the measures to include spending on environmentally friendly projects, Economy Minister Roberto Gualtieri said on Monday.
Italy’s new government, made up of the anti-establishment 5-Star Movement and the centre-left Democratic Party, has promised an expansionary 2020 budget to try to revive chronically stagnant growth in the euro zone’s third largest economy.
Investment spending in Italy amounts to 2% of gross domestic product, a third less than at the start of the decade. Private investments are also below pre-crisis levels having shrunk by 30% between 2007 and 2013, according to the Bank of Italy.
Gualtieri told a conference organised by Italian business lobby Confindustria that the 2020 budget would renew the tax breaks, which would otherwise expire at the end of the year.
“We also want to extend the incentives to those investments that support the transition to environmental sustainability,” he added.
The government must present its next budget by mid-October.
The measures currently in place, introduced by the centre-left government of former Prime Minister Matteo Renzi under the “Industry 4.0” label, allow businesses investing to write off more quickly the value of “smart equipment” – reducing tax payments.
Gualtieri, who last week presented updated budget forecasts, said that also European Union budget rules should offer “a more favourable framework for investments”.
(Reporting by Giuseppe Fonte; Editing by Valentina Za and Alison Williams)