Speaking at the annual forum of business leaders in the Como town of Cernobbio, Padoan said that the government is ”studying a further reduction of taxation in favour of corporate competitiveness”, Il Messaggero reported on Monday.

Imu, an unpopular tax on primary homes, and Tasi, the municipal service tax, will also be abolished from 2016.

The planned tax cuts, which will be made over the next three years, will coincide with crucial reforms in what premier Matteo Renzi described in July as “a pact with Italians”.

There was an air of cautious optimism among business leaders at the forum, Reuters reported, with Stefano Venturi, the chief executive of the US computer company Hewlett-Packard in Italy, telling the newswire on Sunday that the firm is considering boosting investment in the country and hiring new staff.

Since being appointed prime minister in February 2014, Renzi has tackled reforms to the labour market, public administration and the education and banking sector.

The fruits of those efforts are slowing being seen, with the unemployment rate falling to 12 percent in July, while the economy, which staggered out of recession late last year, grew by 0.3 percent in the second quarter. Economic growth for the year is forecast at 0.7 percent.

During a speech at the forum on Friday, an upbeat Renzi said that Italy is “no longer a problem for Europe, but a solid, stable and strong country”.

But those who attended also told Reuters that much more needed to be done to bring Italy's growth in line with the rest of Europe, such as tackling bureaucracy and corruption as well as speeding up the infamously clogged justice system.