Controversial Tax Amnesties Pushed Through In Italy

by Ulrika Lomas, Tax-News.com, Brussels

08 January 2003

It has emerged that despite widespread opposition, Italian Prime Minister, Silvio Berlusconi has pushed forward a plan which will grant an effective amnesty to tax evading companies, similar to his November 2001 initiative which only targeted individuals.

According to reports, included in last month's budget were measures which stipulate that if an individual or small company comes forward and agrees to pay their unpaid tax liability, the government will either forgo, or substantially reduce applicable penalties.

This move has been condemned by many across the political spectrum, who believe that it will destroy the credibility of the Italian tax system, and discourage previously honest taxpayers from fulfilling their obligations.

However, speaking in late December, Mr Berlusconi defended the initiative, arguing that it is popular with the majority of Italian citizens, and that previous governments have shown leniency towards tax evaders in return for the repatriation of undeclared funds, but have not been so open about it.

'We carried out polls which showed that more than 60% of our compatriots, who, I presume are not all fraudsters, are in favour of an amnesty,' he told a recent news conference.

The AFP news agency reported on Monday that the Italian Economy Ministry has predicted that the amnesty will bring in some 8 billion euros in additional tax revenue, which it hopes will provide relief to the currently strained public purse.

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