Georgia Meloni’s first budget bill will be a big headache. The far-right leader, who was sworn in as Italy’s first female prime minister on Saturday, was quick to lay out her plans for the 2023 budget. Problems. opportunities to alleviate the ongoing energy crisis, not to mention meeting other spending promises.

However, a proper fight against widespread tax evasion would provide much-needed ammunition. Meloni’s first budget check could embarrass some veterans in the administration. The most recent budget projections for Italy, which were completed and outlined by outgoing Prime Minister Mario Draghi, point to a budget deficit of 3.4% of GDP in 2023. However, this alone does not take into account further spending and the overall growth of the European Union. funds after the pandemic, which is equivalent to 2% of GDP.

Replicating Draghi’s generous €54bn energy subsidies by October, or 3% of GDP, would double the 2023 budget deficit.

Although Georgia Meloni can count on a tax relief of around €10 billion in 2023, bequeathed to her by Mario Draghi, tax revenue will shrink in the face of a looming recession. And inflation-related costs will rise: According to official figures, pension costs, already the highest in the European Union, will rise to 16.2% of GDP.

In this situation, the introduction of a flat tax of 15%, an element of her proclamations that tax experts believe would cost at least 40 billion euros a year if granted to everyone, seems absurd.

Meanwhile, plans to allow Italians to retire earlier are likely to cost more than 10 billion euros a year. All this will result in a deficit well above the 4.5% level that Citi analysts estimate could lead Italy into negotiations with the European Union.

However, Italy’s new prime minister has options. It could target tax-free domestic revenues, which reached 100 billion euros in 2019. Serious efforts to combat tax evasion would greatly improve his financial situation.

Unfortunately, Meloni and her allies seem to be moving in a different direction. Its program includes an increase in the cash transaction limit, which currently stands at 2,000 euros. This limits the government’s ability to track payments.

Georgia Meloni at least seems poised to deal with $1.1 trillion in unpaid taxes. euros, the payment of which is difficult due to legal disputes. But he can resort to amnesty, a policy often used by ally Silvio Berlusconi, which allows the perpetrators to get away with minimal charges. This approach offers upfront windfall income but does not prevent tax evasion in the long run.