Budget 2026, the "scrapping" law: here's the massive amnesty for those in debt with the tax authorities.

The €18,7 billion budget law has been approved: personal income tax cuts for middle-income earners, support for families and businesses, but cigarette prices are on the rise. Here's how taxes, pensions, and incentives will change.

Actuality First floor

Reading time 2 min.

Gustavo Gentile

October 17, 2025 - 20:53

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2026 Budget: Tax amnesty for debtors, tax cuts for those earning less than €50, and a crackdown on banks and insurance companies.

This is the €18,7 billion budget approved today by the Council of Ministers, which aims to support families and businesses for development, but to cover it also includes increases in tobacco taxes and a new spending review. The government is attempting to reconcile various needs: from reducing the tax wedge to supporting births, from investments in healthcare to incentives for companies to pursue the ecological transition.

TAXES AND SALARIES

Irpef cuts and benefits for contract renewals
The tax wedge cut for the middle income bracket kicks in: the rate drops from 35% to 33%for incomes between 28.000 and 50.000 euros. To support purchasing power, salary increases resulting from contract renewals will be taxed only at the 5% for incomes up to 28.000 euros in 2025 and 2026. Tax breaks also apply to holiday and night shifts, while taxation on productivity bonuses up to 5.000 euros drops from 5% to 1%.

PENSIONS

Block on the auction for workers subjected to heavy labor and increase in minimum wages
Heavy and arduous workers will be excluded from the increase in retirement age expected from 2027. For the others, the increase will be gradual: one month in 2027 and another two from 2028. The minimum pension allowance has been confirmed, which will increase by about 20 euros per month.

SCRAPPING TER

The maxi amnesty: up to 9 years to pay
The "fiscal peace" is back: the fifth edition of the scrapping program includes 54 bimonthly installments of the same amount, without requiring any minimum initial payment. The benefit will be revoked if two installments are missed, requiring immediate payment of the entire debt.

FAMILY AND HOME

Tax relief for separated couples and exemption for first homes from ISEE
New for separated parents facing housing difficulties: a dedicated tax "contribution" is coming.

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The first house, up to a cadastral value of approximately 92.000 €, will no longer be counted in the ISEE calculation. Construction bonuses (50% for a first home, 36% for a second) and optional parental leave, paid at 80% for three months, have been confirmed. The bonus for working mothers increases from €40 to €60 per month for families with an ISEE below €40.000 and at least two children. The €500 "Dedicated to You Card" for families in difficulty has been refinanced.

HEALTHCARE

2,4 billion more: higher hiring and salaries
Settled 2,4 billion additional resources for healthcare in 2026. Resources which, according to the government's plans, will allow for the hiring of 6.300 nurses and 1.000 doctors and to increase salaries in the sector: +1.630 euros for nurses and +3.000 euros for doctors.

BUSINESSES

Super-depreciation relaunched as "Transition 5.0"
Green light a 4 billion to relaunch investments: companies will be able to amortize the 180%of innovation expenditure and the 220% of those for the ecological transition. The plastic tax and sugar tax have been extended until December 31, 2026.

FINANCE

Banks and insurance companies pay out 11 billion in three years
Agreement with the financial sector: banks will be able to release reserves by paying a reduced tax 27,5% (from 40%). Measures which, together with the contribution of insurance companies, will guarantee 4,4 billion and in 2026 11 billion in the three-year period.

COVERS

Spending cuts, National Recovery and Resilience Plan (PNRR), and more expensive cigarettes
The maneuver is financed with a new spending review by 2,3 billion for the ministries, the remodulation of the PNRR (approximately 5 billion) and the increase in the price of cigarettesThe alignment of excise duties on petrol and diesel is also coming.