OECD Network on Fiscal Relations across Levels of Government, 16th Annual Meeting, 3-4 December 2020 – Virtual Meeting

1. Italian response to the crisis
caused by Covid-19
Di Fazio Giacomo Antonio
Ministry of Economic and Finance
16th Annual Meeting of the
Network on Fiscal Relations Across Levels
of Government
Virtual Meeting
3-4 December 2020

2. Numbers of COVID-19 pandemic in Italy
7-day rolling average of new daily tests, share of positive tests and people
healed
Source: Ministry of Health

3. Economic crisis

4. Italian response to health and economic crisis
Total resources allocated to date in response to the emergency amount over to
€ 120 billion.
This enormous effort, in terms of size and scope, aims to defend Italy's
production capacity and limiting the drop in GDP as well as mitigating the
other economic and social effects of the pandemic.
The main measures approved by the Government are:
1. Strengthening of the National Health System and the Department of Civil
Protection;
2. Preserve employment levels and incomes;
3. Strengthening support for economic and productive activities;
4. Suspend the payment of taxes and provide tax incentives to workers and
businesses;
5. Allocate significant resources to Local authorities.

5. Healthcare and Civil Protection
The Government has allocated 9.5 billion euros to ensure staffing and tools for the
health care system, the civil protection department and law enforcement bodies in
order to assist people affected by the disease and prevent, mitigate and
contain the epidemic.
In particular:
 The National Emergency Fund was refinanced for 3.73 billion;
 1.4 billion euros have been allocated creation of 3,500 new intensive care beds and
requalification of 4,225 new beds in the semi-intensive area,
 1.2 billion for the strengthening of territorial assistance, in particular assistance to
patients in home isolation;
 Hires in the national health system amounted to 20,000 and the Regions have the right
to re-determine their own personnel needs plans;
 It is authorized to provide subsidized loans or non-repayable contributions to
companies producing medical devices and personal protective equipment (50 million);
 The expenditure on scholarships for medical specialists increased by 105 million euros
for 2020 and 2021 and by 109 million euros for each of the years 2022, 2023 and
2024.

6. Tax measures
Various tax measures have been adopted, which aim to provide additional and
substantial support for the liquidity of households and businesses.
• Suspension of taxes, with no turnover limits, for the most affected sectors;
• Exemption of the June IRAP (regional tax on productive activities) balance and
advance payment, for companies with turnover up to €250 million;
• Tax credit for sanitation;
• Tax credits of up to 110% of the costs, for restructuring of domestic buildings
aimed at improving energy efficiency and structural and seismic resilience in years
2020 and 2021
• Tax credit for commercial rents;
• Exemption from the ‘TOSAP’ (tax on the occupation of public spaces and areas)
and ‘COSAP’ (fee for the occupation of public spaces and areas) until 31
December 2020;
• Exemption from second instalment of the IMU property tax in 2020, for some
categories of properties, such as hotels and guesthouses and tourist
accommodation facilities;
• Exemption from IMU property tax in 2021 and 2022 for cinemas and theaters.

7. Resources to Local authorities
Over € 10 billion to ensure the regularity of public action at all levels of
government.
Creation of two funds (one for local authorities and one for regional authorities)
to deal with lower tax revenues and safeguard budget balances:
• € 5.17 billion for local authorities to perform their function (€ 4.22 billion for municipalities
and € 0.95 billion for provinces and metropolitan cities);
• € 4.3 billion for the regional authorities to perform their functions.
Additional resources have been allocated:
• to make up for the lower revenues from the tourist tax (€ 400 million), Tosap/Cosap (€ 210
million) and the IMU property tax (€ 160 million);
• to support local public transport (€ 400 million), to support local authorities with a structural
deficit (€ 350 million for the 2020-22 three-year period) and for regional disputes (€ 210
million);
• to suspend the 2020 principal repayments for the MEF mortgages of the autonomous
provinces (€ 88 million).
Investment measures have also been strengthened:
• To make buildings and the local area safe (€ 900 million in 2021 and € 1.75 billion in 2022);
• to ensure the safety of schools (€ 1.12 billion for the 2021-2025 period) and to make bridges
and viaducts safe (€ 600 million in the 2021-2023 period).

8. Conclusion and future prospects
 Continue cooperation between different levels of government
 Ensuring Italy's economic and social stability, supporting employment,
guaranteeing families’ incomes and living conditions and expanding social
safeguards
 Guarantying a recovery characterized by investments, innovation, growth and
environmental and social sustainability, introducing new tools to combine
economic recovery, social cohesion and safety

9. Thank you!