Meloni pledges middle-class tax cuts at Confcommercio assembly, rejects wealth tax as GDP outlook brightens

A decade-long absence ends

Prime Minister Giorgia Meloni addressed the annual assembly of Confcommercio in Rome, marking the first time in ten years that an Italian prime minister has attended the event. She was welcomed with applause in a crowded auditorium, with front-row seats occupied by Deputy Prime Minister Antonio Tajani, Senate President Ignazio La Russa, and several cabinet ministers. Opposition leaders, including PD secretary Elly Schlein and Giuseppe Conte, were absent.

Tax cuts versus wealth tax

Meloni used the platform to draw a sharp contrast between her government's fiscal policy and proposals emerging from the left. She stated that the government started by cutting taxes on labour for lower incomes and now intends to broaden the effort. "We do not intend to stop, we want to do more, particularly to lighten the tax burden on the middle class, because cutting taxes is one of this government's great objectives," she said. Confcommercio president Carlo Sangalli had earlier called for a reduction of the central income-tax rate from 35% to 33% for incomes up to 60,000 euros.

Others talk about taxing wealth; we work so that Italians can aspire to have wealth after decades of work and sacrifice.

Meloni's rejection of a wealth tax follows an apparent opening to the idea by PD secretary Elly Schlein, which has stirred debate within the centre-left. The prime minister claimed the government is returning 21 billion euros annually to workers' pockets through the tax-wedge cut.

The fiscal record under scrutiny

Despite the tax-cutting rhetoric, several outlets noted that Italy's overall tax burden has risen during Meloni's tenure. The tax-to-GDP ratio climbed from 41.7% in 2022 to 42.6% in 2024, with a forecast of 42.8% in 2025. Irpef receipts grew significantly in 2024, weighing on employees and pensioners, as certified by Istat.

Crackdown on irregular businesses

Meloni touted the forced closure of 24,000 so-called "open-and-close" businesses, which she described as enterprises often run by non-EU nationals who evade taxes by shutting down and reopening under new names. "This is not the Banana Republic. Here, rules are respected," she told the audience, framing the crackdown as a defence of honest entrepreneurs against unfair competition.

The message we want to send to everyone is that this is not the Banana Republic. Here, rules are respected.

Macroeconomic optimism and the Hormuz factor

Treasury indications suggest Italy will close the second quarter with positive GDP, building on the 0.3% growth recorded between January and March, with 0.6% already locked in for the full year. Confcommercio's research centre estimates 0.9% growth for 2026, the most optimistic forecast circulating. Meloni thanked Sangalli for not joining the "chorus of pessimism," arguing it is intellectually dishonest to downplay encouraging macroeconomic data. She also addressed fuel costs, still affected by the Strait of Hormuz crisis, pledging continued government support for hauliers' fuel purchases.

Mattarella's call for social dialogue

President Sergio Mattarella sent a message to the assembly, warning that the productive system faces a particularly delicate phase amid profound transformations and an increasingly difficult international landscape. He called for "authentic dialogue between institutions and society" and urged social partners to counter distortions in labour relations that risk eroding worker protections and social cohesion.

The current complexities require authentic dialogue between institutions and society.

Urban regeneration and local commerce

Meloni also presented the government's Housing Plan as an opportunity to regenerate cities and make spaces more welcoming. She proposed a new model of urban development centred on people, with integrated building programmes that include commercial premises and neighbourhood services. Local shops, she said, are territorial presidios that "no online platform will ever be able to replace."