Italian tax revenue fell 0.3 percent in the first quarter as the country’s two-year recession continues to erode consumer spending.
Total tax revenue in the first three months through March amounted to 87.8 billion euros ($114.9 billion), down 223 million euros from the same quarter last year, according to a report by the Finance Ministry posted on its website.
Indirect taxes fell 7.4 percent, or by about 3 billion euros, with revenue from the value-added tax dropping 8.6 percent. The fall was only partially offset by an increase of direct taxes of 5.9 percent, or 2.8 billion euros.
Italian household spending has contracted as the country remains mired in its longest recession in more than two decades. With unemployment remaining near a 20-year high, the new government has pledged a series of tax cuts to boost growth and create jobs. Prime Minister Enrico Letta has also said he will seek to postpone a 1 percentage point increases in the value-added tax due in July.
Income tax accounted for 50.3 percent of revenue in the first quarter, up from 49.3 percent the previous year. Value-added tax fell to 22.9 percent of the total from 25 percent a year earlier.