Introduction sectionUpdate Note of the DEF

Update Note of the DEF

The Update Note of the DEF, envisaged by Art. 2 Law No. 39 of 7 April 2011, must be submitted to Parliament by September 20 each year. Unlike what was envisaged by the previous law, under the new regulations the Update Note is a legal requirement; the Note enables updating of economic and public finance forecasts on the basis of more stable information available on the performance of the macroeconomic situation (for which data are available on the first two quarters of the year) and public finance compared to estimates used in the DEF. Secondly, the Note enables updating of policy targets, taking into consideration recommendations adopted by the Council of the European Union on the Update of the Stability Program, also on the basis of agreements reached with the Permanent conference on public finance coordination. In these cases the Government sends the guidelines for sharing the targets to both Parliament and the Permanent conference . The Update of the planning document also sets the net balance targets of the government budget and the cash balance of the State sector to be financed.Finally, the Update also defines the content of the Internal Stability Pact , with the sanctions to impose, and of the Convergence Pact. Policy targets may also be updated in the course of the year. Reviewing targets is also allowed in case of extraordinary events and when departure of public finance performance from the set targets is such as to require the adoption of corrective measures. In this case the Government sends Parliament a report making the case for an update or explaining the reasons for such departure and the corretive measures it intends to adopt.

Law No. 39 of 2011– for the same purposes as envisaged for the Update Note of the DEF – envisages that in case of exceptional events or in case of substantial departure of the public finance performance from the targets, which render corrective action necessary, if Government wishes to update targets, it should send Parliament a report stating the reasons for the update or for the departure, as well as the corrective action it intends to adopt.

Starting in 2013, the Minister of Economy and Finance shall include a report on the results of measures taken to combat tax evasion as an annex to the Update Note to the DEF. This report (as required by Decree Law 13-8-2011, n. 138, art.2, comma 36.1, inserted L. 24 December 2012, n. 228, art. 1, comma 299, let. B) outlines the strategies for combatting tax evasion, updating and comparing the results with the intended objectives. The report highlights, where possible, the recovery of tax revenue attributable to an increase in compliance by taxpayers.

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