ROME, Dec. 31 (Xinhua) -- Italy's lower house passed the 2026 budget law on Tuesday, providing the definitive approval for a package worth about 22 billion euros (25.8 billion U.S. dollars) for next year.

The package aims to lower Italy's deficit to 2.8 percent of gross domestic product (GDP) in 2026, down from a projected 3 percent in 2025, which would allow the country to exit an infringement procedure for excessive deficit initiated by the European Union (EU) in 2024.

The draft was approved by a large majority of deputies with 216 votes in favor, 126 against, and three abstentions, according to the lower house. This was the fourth financial bill approved since Prime Minister Giorgia Meloni's cabinet came to power in October 2022. By law, it required approval from both chambers of parliament by year end, and the Senate had passed it last week.

Key provisions include a limited tax cut, from 35 percent to 33 percent, for middle-class households with an annual income between 28,000 and 50,000 euros (32,855-58,670 dollars).

It will "protect taxpayers with average incomes, and extending the number of those who had benefited from the tax wedge involves 32 percent of the total number of taxpayers" for an expected average benefit of 218 euros (255.8 dollars) per year, said Italian Minister of Economy and Finance Giancarlo Giorgetti during a hearing on the budget manoeuvre last month and reported by Italy's business daily Il Sole 24 Ore.

In a last-minute provision introduced by the cabinet just before senators voted last week, an additional 3.5 billion euros (4.1 billion dollars) was allocated to struggling companies and to boost corporate technological innovation.

The budget introduces a series of tax hikes on banks, insurance companies, and other financial market operators, which are expected to generate 5 to 6 billion euros (5.9 to 7 billion dollars) of funding next year.

It also includes small tax increases on a range of products popular with Italian consumers, including a 2-euro (2.4-dollar) flat tax on small packages worth less than 150 euros (176 dollars) sent from outside the EU, such as those ordered from Chinese online platforms Temu and Shein.

In a social media post on X, PM Meloni described the budget as "serious and responsible, and built in a challenging context," and stressed the cabinet's effort to allocate "limited resources on key priorities: families, work, companies, and healthcare."

The main center-left force, the Democratic Party, and other opposition parties have criticized the package, saying it would introduce austerity measures that would not benefit the bulk of Italian workers nor boost growth.

Italy's public debt, the eurozone's second highest relative to GDP after Greece, is projected to rise to 137.4 percent in 2026 from an estimated 136.2 percent in 2025. Economic growth is forecast at 0.5 percent in 2025 and 0.7 percent in 2026. ■