Premier Giorgia Meloni unveiled Italy’s 2026 budget bill, describing it as a “serious” plan built around families, business growth and tax relief. The cabinet approved the draft on Friday.
Meloni said the budget maintains the government’s priorities from previous years — supporting families and tackling Italy’s low birth rate, reducing taxes, aiding businesses and strengthening healthcare. It includes €8 billion in investments for businesses and an additional €1.6 billion in support for families.
A means-tested monthly bonus for working mothers will rise from €40 to €60. Meanwhile, €2.8 billion has been allocated to cutting the second band of the Irpef income tax. The rate for earnings between €28,000 and €50,000 will drop from 35% to 33%, a move Meloni said was designed to “focus on the middle class.”
A further €1.9 billion will go towards boosting salaries through tax breaks on productivity bonuses, night work and shifts on national holidays.
Meloni said much of the funding for these measures would come from cuts to her own department and other ministries. She also thanked Italy’s banks and insurers for their “important contribution” to the budget.
The coalition parties reached an agreement on Thursday over a €4.4 billion contribution from banks and insurance firms. The deal came after tensions between Forza Italia, which had opposed a windfall tax on profits, and Matteo Salvini’s League party.
Economy Minister Giancarlo Giorgetti confirmed that the banks had accepted the contribution “reluctantly, certainly not happily,” but said the impact was “absolutely acceptable.” He described Italy’s banking system as “solid and very profitable.”
Irpef cut primarily targets middle-income earners
Giorgetti added that while the Irpef cut primarily targets middle-income earners, people earning above €50,000 would still benefit. The reduction will only be neutralised for those earning €200,000 or more.
He also clarified that a new system allowing taxpayers to settle disputes over nine years was not an “amnesty” for tax evaders.
The 2026 budget bill will now move to parliament for debate and approval.
