Italian State Budget 2025: revenues on the rise, but lotteries and gambling decline
In the first half of 2025, the Italian State Budget shows a positive trend in tax and social contribution revenues. Direct and indirect taxes are increasing, as are social security contributions, while the gambling and lottery sector records a downturn.
Tax and contribution revenues on the rise
In the first six months of 2025, overall revenues increased by €33.8 billion, equal to +8.4% compared with the same period in 2024. This growth stems from two main factors:
- higher tax revenues, up by €21.3 billion (+7.8%),
- and stronger social contribution revenues, which rose by €12.5 billion (+9.7%).
This performance reflects both the strengthening of tax receipts and the positive labour market trend supporting social security contributions.
IRPEF shows modest growth
Revenue from personal income tax (IRPEF) reached €113.4 billion, marking a modest increase of +0.4%. However, employee withholding taxes declined by €790 million (-0.7%). This fall is linked to the new labour tax wedge measures introduced in the 2025 Budget Law.
Conversely, self-assessed tax payments showed a sharp rise, up 34.4% (+€895 million).
IRES and substitute taxes see strong growth
Corporate income tax (IRES) recorded a significant increase, amounting to €17 billion, up more than €9 billion compared to 2024. Substitute taxes on capital income and capital gains also performed well (+€1.3 billion), as did those on pension funds (+€1.2 billion).
This growth is tied to the strong performance of managed savings in 2024, which saw both an increase in the number of accounts and robust investment returns.
VAT and excise duties rise
On the indirect tax front, VAT remains the largest source of revenue, totalling €82.2 billion (+2.6%). Most of this came from domestic transactions (€73.1 billion), while imports contributed €9.1 billion.
Excise duties on energy products also increased, bringing in an additional €229 million (+2%).
Lotteries and gambling revenues fall
In contrast to the general upward trend, the lotteries and gambling sector shows a decline. In the first half of 2025, revenues amounted to €3.35 billion, down 2.4% compared to the same period in 2024.
This decrease is also reflected in actual collections, which stood at €3.31 billion, a drop of €74 million (-2.2%). The data points to a contraction in the public gaming sector, which in the past often contributed significantly to state revenues.
A healthy budget with some weak spots
The Italian State Budget 2025 presents an overall positive picture, supported by stronger direct tax revenues, the surge in corporate income tax, and the solid contribution of VAT. Social security contributions are also showing robust growth.
However, the decline in gambling and lottery revenues serves as a warning sign. While the overall figures strengthen the stability of Italy’s public finances, there is also a need to assess more balanced fiscal policies and to consider the impact of the new measures on the labour tax wedge.
This article was first published in Italian on 20 August 2025.
