The budget required long negotiations between the parties that make up Italy’s recently formed coalition government. The government's main intention was to avoid a scheduled sales tax hike, which would have weighed on Italy's struggling economy.
Though it is introducing new levies on sugary drinks and on plastic packaging, the government has said it will plug the shortfall left by the ditching of the sales tax commitment and by borrowing more.
The government had hoped to raise more from the new levies but both of the original proposals were diluted after an outcry from Italian businesses. The so-called “plastic tax” was cut down from 1 euro per kg to 0.45 euros per kg, following protests from both businesses and consumers’ associations. It will apply to single-use plastic packaging manufactured or imported to Italy and will take effect from July 2020.
The 5-Star Movement, which has always put environment-friendly policies at the top of this agenda, was largely behind the levy. Meanwhile, the tax on sugary non-alcoholic drinks has been kept at 10 cents per liter, but its introduction has been delayed until October from July.