Italian government to study alternative measures to avoid VAT hikes

MILANO - The Italian government will study alternative measures to avoid controversial planned hikes in the sales tax without putting budget goals at risk, Economy Minister Giovanni Tria said on Wednesday.

In its next budget, Italy's government must find a way to avoid some 23 billion euros ($26 billion) of hikes in the value-added tax (VAT) rate scheduled to take effect in 2020.

Tria added that budget forecasts the government released last week in the Economic and Financial Document (DEF) imply public debt is fully sustainable even with slower economic growth.

In the DEF, the Treasury raised this year's budget deficit target to 2.4 percent of GDP from a 2.04 percent goal set in December after a drawn-out tussle with the European Commission.

(Reporting by Giuseppe Fonte, writing by Maria Pia Quaglia, editing by Valentina Za) ((mariapia.quaglia@tr.com; +39 02 66129638; Reuters Messaging: mariapia.quaglia.thomsonreuters.com@reuters.net))