Italian Ministers Said To Be Mulling Extra Investment Taxes

by Ulrika Lomas, Tax-News.com, Brussels

08 June 2005

Italian Prime Minister Silvio Berlusconi has refuted suggestions that the government is exploring the possibility of raising additional revenues from extra taxes on investment income.

When asked by reporters on the sidelines of a conference whether taxes on capital gains, dividends and other investments were going to be increased, Berlusconi replied simply: "No."

However, some of Berlusconi's ministers have indicated recently that the government must look to raise additional sources of revenue to compensate for the phasing out of a regional business tax know as Irap.

"The greatest taxation reforms are made by shifting the weight of taxation from one tax to another," Economy Minister, Domenico Siniscalco told a conference of young entrepreneurs.

"It is difficult to move taxation onto consumption, it is not a clever move in a moment in which families struggle to reach the end of the month economically. We must therefore look towards another area, but also onto spending and tax evasion," he continued, adding that:

"We must also stop making tax amnesties and look more at liberalising the market and competition."

However, addressing the same conference, Agriculture Minister, Gianni Alemanno was more explicit.

Contradicting the Prime Minister's firm opposition to additional investment taxes, Alemanno argued that the government "must move the weight of taxation off of businesses and onto investment income, where taxation is currently very low."

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