Istat hearing: flat tax saves freelancers 8,000 euro, pensioners lose 510 euro gross a year

What Istat's simulations show

Istat, Italy's national statistics institute, presented simulations of the main measures in the 2027 budget bill to the budget committees of the Chamber and the Senate on 11 November. The analysis covers 6.5 million families, roughly one in four, of which 3.5 million gain and 3 million lose out. Istat puts the average loss for the losing households at a little over 200 euro a year. Reports differ on the average gain for winners: 600 euro per family in one account and 650 euro in another. Istat's breakdown places the largest benefits among the lowest incomes in the group, while more than three quarters of the gaining families belong to the richest 40% of the population.

Families gaining3.5

Families losing3

Families gaining

3.5 million families

Families losing

3 million families

Data from the article text

Pensioners carry the heaviest cost

The sharpest losses fall on pensioners. Under a stricter inflation revaluation that now works through six bands, pensions above 2,447 euro gross lose on average 510 euro gross a year in 2027. Istat puts the number affected at 3.5 million, while one account gives 3.6 million. After the net effect of lower taxes, the loss shrinks to 290 euro net. For pensioners who also benefit from the Irpef cut, it falls further to 150 euro.

Flat tax, Irpef and the mothers' bonus

Self-employed workers are the clearest winners. About 55,000 freelancers (partite Iva) with revenue between 85,000 and 100,000 euro would move into the simplified flat-tax regime and pay around 8,000 euro less in taxes a year. The government had estimated 41,000 new entries. The Irpef cut extends the 33% rate to incomes up to 55,000 euro and gives an average 450 euro to 3.7 million taxpayers. Francesco Maria Chelli, the president of Istat, described the cost of the flat-tax change in his hearing:

“This change will affect around 3.7 million taxpayers and bring a revenue reduction of just under 1.7 billion.”

The technical report accompanying the bill had indicated a revenue loss of 1.434 billion, a figure Chelli's estimate exceeds. The mothers' bonus for working women with at least two children rises to 1,100 euro a year, and most beneficiaries gain about 460 euro compared with last year. Reports differ on how many mothers gain, with one account citing about one million and another 820,000. Meanwhile 160,000 mothers with at least three children, who had enjoyed a full exemption from social security contributions, will lose 400 euro on average.

Growth and fiscal drag

Istat forecasts GDP growth of 0.9% in 2026, below the 1% estimated by the Treasury, and 0.6% in 2027. Employment is slowing while inflation is accelerating. Istat's fiscal drag, the rise in tax burden when nominal prices and wages climb without brackets being adjusted, is projected to bring in 6.5 billion euro in 2026, 5.4 billion in 2027 and 3.5 billion in 2028. Istat says the drag absorbs 1,100 euro of the average 1,000 euro gain from tax reforms between 2021 and 2027. Pensioners end up 350 euro a year worse off and employees 50 euro better off.

20266.5

20275.4

20283.5

2026

6.5 billion euro

2027

5.4 billion euro

2028

3.5 billion euro

Data from the article text

Confindustria and the regions push back

Maurizio Tarquini, director general of Confindustria, told the hearing that 43% of the budget's total cover falls on businesses, mainly through sector measures on banking, insurance, energy and gaming. He welcomed the cut in energy costs as the first priority, but asked that the energy release, currently limited to non-energy-intensive SMEs, be extended to large firms. He proposed raising the fund for indirect ETS costs from 600 million to 800 to 900 million euro. Tarquini also objected to a rule on building tax credits that stretches recovery from four years to ten, a change he said creates a serious legal certainty problem for firms that bought the credits in 2023. Confindustria puts the 2027 net borrowing effect of that measure at about 18 billion euro. He said:

“We ask Parliament to use the budget review to correct provisions that drain liquidity and to strengthen support for investment.”

Regions and provinces warned that health service levels may not be guaranteed in 2026. Confindustria counted 38 measures with effects limited to 2027, worth 8.4 billion euro, of which 13 are new one-off measures and 25 are simple extensions. Municipalities also raised concerns about their own budgets.

Opposition criticism

Pasquale Tridico, head of the Five Star Movement delegation in the European Parliament, said in a statement that the budget would push Italy into stagflation, where flat growth meets very high inflation. He wrote:

“The government's budget fails on every count and will take us straight into stagflation, where flat economic growth is combined with inflation through the roof.”

Tridico said the Irpef cut would deliver at most 42 euro a month and that the fiscal drag would take 5.4 billion euro in 2027. He also said Giorgia Meloni had announced video explanations of the budget on social media, and he asked that all of the Istat figures be cited in them.