October 15, 2018 / 6:47 PM / a month ago

Italy budget cuts tax breaks on banks' interest payments: government source

FILE PHOTO: Italian Economy Minister Giovanni Tria attends as Prime Minister Giuseppe Conte (unseen) speaks during his first session at the Lower House of the Parliament in Rome, Italy, June 6, 2018. REUTERS/Tony Gentile/File Photo

ROME (Reuters) - Italy’s 2019 budget cuts tax benefits for banks as a way of raising money to fund higher welfare spending and tax cuts in other areas, a government source said on Monday.

The budget reduces to 86 percent the proportion of interest payments that banks can deduct from their taxable income, instead of 100 percent as is currently the case, the source said as the cabinet was meeting to sign off on the budget.

The right-wing League party, which rules with the anti-establishment 5-Star Movement, said the budget will include no tax increase other than on banks and insurance companies.

Reporting by Giuseppe Fonte, writing by Gavin Jones

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