Repeated Calls For Italian Tax Burden Reduction

by Ulrika Lomas, Tax-News.com, Brussels

14 June 2010

CIGA (the association of sole traders and small businesses) has produced statistics showing an increased tax burden on Italian taxpayers, and Emma Marcegaglia, President of Confindustria, the Italian industrial federation, has joined her voice with those asking for immediate personal and corporate tax reductions.

Giuseppe Bortolussi, Secretary of CIGA, disclosed that the burden on Italian taxpayers is almost 52%. This, he announced, was nearly 9% more than the official figures produced for last year, which put the tax burden at only some 43.2%.

He emphasised that it was not that the official statistical agency had made a mistake, but that the latter had to apply the rules of Eurostat, which has decreed that all European countries should include their underground economies within the calculation of their respective tax burdens. Adding an estimated EUR250bn (USD304bn) to Italian gross domestic product to take account of the extent of the Italian underground economy reduces the official tax burden substantially.

CIGA has, instead, in its opinion, produced a more realistic figure based on the tax burden for those actually paying tax. In addition, it said, while the latest actual figures used are for 2006, there has, most probably, also been an increase in tax evasion in recent years of economic recession.

CIGA’s analysis, Giuseppe Bortolussi concluded, represents another demonstration that, in Italy, whoever is known to the fiscal authorities pays more in tax than is shown by official figures. For that reason, a serious fight against tax evasion is absolutely necessary to bring to the light those parts of the economy not currently taxed and increase tax revenue, thereby enabling a reduction in taxes on those who, until now, have paid more than they should have to.

At the same time, Emma Marcegaglia, at a business conference in Santa Margherita Ligure, returned to her recent theme, stressing the importance of reducing the burden of taxes on both businesses and employees, so that the Italian economy could recover more strongly from the recession.

She argued that it is essential for public expenditure to be reduced, as has been begun in the government’s recent EUR24bn fiscal package, to correct imbalances in the public sector deficit, but that tax reform had also to begin as soon as possible in order to support the nascent economic recovery.

She called on the Minister of the Economy, Giulio Tremonti, who was also at the conference, to begin a dialogue on real tax reform immediately. The objective of that reform should be to reduce the high taxes suffered by both companies and workers and, thereby, encourage investment and economic growth.

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