Italy's government lowered tax on low income earners so as to boost household income and domestic demand.
Prime Minister Matteo Renzi on Friday said the reduction will help about 10 million tax payers.
He said the move will reduce taxes by around EUR 80 per month, starting May, for people earning less than EUR 26,000 a year.
The government will also reduce business taxes moderately this year. Further, he outlined EUR 6.9 billion worth measures to ease the burden on the public finances.
Renzi is under immense pressure from EU countries to bring the budget deficit to 3 percent of GDP. The government estimates the economy to grow 0.8 percent this year.
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