On October 28, 2026, Italian Prime Minister Giorgia Meloni unveiled the 2027 budget package, a comprehensive economic plan designed to address the needs of Italians across various sectors. The package, worth approximately 26 billion euros, is meant to provide relief and support to citizens, particularly focusing on young workers and energy costs.
One of the most significant elements of the budget package is the structural vehicle tax relief. As Meloni explained, 'This means no road tax for small-to-medium-powered cars—up to 80 kilowatts—or for motorcycles. We are talking about roughly 70% of the vehicles currently on the road.' This relief is expected to benefit a large portion of the Italian population, making it easier for many to own and drive vehicles.
The budget package also includes adjustments to personal income tax. Meloni announced that the threshold for the second personal income tax (IRPEF) bracket would be raised to 55,000 euros per year. Additionally, a 5% flat tax would be introduced for newly hired people under 35, with a reduced 'agreed-rent' tax rate of 5% or 1% if the tenant is under 35. These measures are intended to support young workers and encourage hiring in the private sector.
The Italian Cabinet approved the 2027 budget bill on the same day it was announced.
Energy costs have been a significant concern for many Italians. The 2027 budget package includes a gas price cap at €58.9 per megawatt-hour, with an application period of 12 to 18 months. This measure is part of a broader effort to reduce energy costs for households and businesses. Meloni stated, 'We have decided to use a portion of the energy-related flexibility resources to equip all schools with air conditioning units and heat pumps, making our classrooms more comfortable.'
The budget package also includes a newborn fund, providing a state contribution of €100 annually for each newborn until the child turns 18. This measure is designed to support families and encourage the birth rate. Additionally, the package includes reforms to the craft sector and outdoor seating regulations, aimed at boosting the local economy and supporting small businesses.
The Italian Cabinet approved the 2027 budget bill on the same day it was announced. Economy Minister Giancarlo Giorgetti pledged to address young workers' needs, stating, 'We'll come up with something for young workers.' The approval process reflects the government's commitment to implementing the budget package as soon as possible.
In her press conference, Meloni expressed the ambition behind the budget package. She said, 'If we could have, we would have done much more.' This statement underscores the government's desire to address a wide range of economic issues and support the Italian people. However, the 26 billion euros allocated to the budget package is a significant investment in the country's future.
The measures for young workers are particularly noteworthy. The 5% flat tax for newly hired people under 35 is a significant step towards reducing the financial burden on young professionals entering the workforce. This tax relief, combined with the reduced 'agreed-rent' tax rate, is intended to make it easier for young workers to start their careers and find affordable housing.
The 2027 budget package, worth approximately 26 billion euros, is a comprehensive economic plan aimed at providing relief and support to the Italian people. With measures to reduce vehicle taxes, personal income taxes, and energy costs, the package is designed to benefit a wide range of citizens. The focus on young workers and the craft sector reflects the government's commitment to addressing the needs of the future. While the package is a significant investment, it remains to be seen how effectively it will address the economic challenges facing Italy.