MILAN (Reuters) - Italy's government is close to scrapping an unpopular property tax but is divided over when, Regional Relations Minister Graziano Del Rio was quoted as saying by daily La Stampa on Monday.
On Saturday evening, Industry Minister Flavio Zanotato said a deal on ending the IMU tax for primary residences could be announced in autumn.
Del Rio said an agreement was near, but a decision over whether to scrap IMU payments due in December or only in 2014 "is a key point and the debate is still open."
Without giving details, he said the tax would be dropped on standard primary residences but be retained on luxury ones.
Prime Minister Enrico Letta is juggling demands to axe the property tax from members of his fragile coalition with pressure to stick within strict European Union-mandated budget limits.
The government has estimated that cancelling IMU would take out 4 billion euros ($5.26 billion) in tax revenues from an already strained budget.
Letta has already delayed a VAT hike and suspended IMU payments while promising to reform IMU by end-August.
The economy minister meets on Monday with officials from the parties of the governing coalition to discuss property tax reforms.
Del Rio said the government could fund the IMU reform by closing down some provincial administrations, a measure proposed by the previous government but never implemented.
(Reporting by Francesca Landini; Editing by John Stonestreet)
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