August 12, 2011 / 6:15 PM / in 8 years

Italy draft austerity plan hikes tax, pension age

ROME, Aug 12 (Reuters) - The austerity package set to be adopted by the Italian government on Friday contains provisions for a levy on incomes over 90,000 euros and higher retirement ages for women in the private sector, government sources said.

It will also increase the tax rate on income earned from financial investments, excluding government bonds, to 20 percent from a previous level of 12.5 percent, a source with knowledge of the draft plans said.

One government source said a so-called “solidarity tax” would be set at 5 percent for incomes over 90,000 euros and at 10 percent for incomes over 150,000 euros, confirming a report in business daily Il Sole 24 Ore.

A separate source said the package would also bring forward planned staged increases in the retirement age for women in the private sector to start from 2015 from a previously planned 2020.

“The increase in the pension age for women in the private sector will begin from 2015 instead of in 2020 but the rate of increase will remain the same,” the source said.

The plan will also abolish 34 of Italy’s 110 provincial governments and merges town councils with fewer than 1,000 inhabitants as part of a drive to cut the cost of Italy’s complicated system of government, said a spokesman for the mayor of Rome. (Reporting by Antonella Cinelli and Giselda Vagnoni)

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