Italy To Introduce Corporate Tax Amnesty
Resorting to ever more imaginative ways to raise revenues, the Italian government
is set to introduce amendments to the 2006 budget including a corporate tax
amnesty and a tax on pornographic material as the government seeks to cut the
size of its budget deficit. The tax amnesty will allow companies and the self employed to declare hidden
income relating to the years 2003 and 2004 in return for paying a levy on the
income. Another measure will permit Italians to pay a limited, agreed sum
on profits made between 2005 and 2007 in a bid to cut extensive tax evasion.
The government estimates that the measures will bring in an additional EUR3.6
billion, although critics counter that frequent tax amnesty schemes merely encourage
tax evasion. The budget amendments package also contains a new tax of 25% on the income
of companies that make or sell pornographic material and the government also
wants to add an extra 10 percentage points to value-added tax that is paid on
subscriptions to pornographic television channels. The 2006 budget package aims to cut Italy's budget deficit to 3.8% of GDP next
year, down from 4.3% in 2005. However, this will still mean that Rome has breached
the European Union's 3% of GDP deficit ceiling for the third consecutive year.
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