As predicted, the President of the central government has announced a massive 65,000 million package of cuts which includes a hike in IVA, lower unemployment benefits, the disappearance of tax benefits for buying a house and the suppression of extra Christmas payments for public employees.
From tomorrow the general rate of IVA will rise by three points from 18 to 21% and from 8 to 10% for the reduced rate. The lower rate of IVA on essential basic foodstuffs will remain at 4%.
Next year the tax deduction for people buying their own home will disappear.
Newly unemployed people will have their benefit reduced after six months, “to motivate them to seek employment,” but the period of entitlement remains at 24 months.
The extra Christmas payments for all public sector workers will disappear this year and the number of “free days” will be reduced.
Future proposals for further reducing the deficit may include a rise in the price of tobacco; a special tax for “those who contaminate;” a reduction in the number of public sector workers and representatives in local and regional administrations; cuts in subsidies to political parties, trade unions and businesses; a revision of the Law of Independence which currently provides funds for care in the community; and a rise in the retirement age to 67 years.
