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20% Of Italian Families' Tax Returns Are 'Incongruous'

by Ulrika Lomas, Tax-News.com, Brussels

23 November 2012


At the launch of a do-it-yourself 'Redditest,' the General Manager of the Italian Revenue Agency, Attilio Befera, also indicated that, from a simulation of the new 'redditometro,' some 20% of the income tax returns presented by families were found to be "incongruous."

According to the simulation, the redditometro - the computer data system which crosschecks taxpayers' income declarations with their spending habits - found that more than 4.3m families declared income that was inconsistent with their known expenditure. In addition, even greater irregularities were found in the profits of companies and sole traders, and almost 1m families declared an income which was "very close to zero," while spending much more.

After a significant delay, Befera declared that the redditometro was now ready and, pending the go-ahead from a ministerial decree, should be in operation from January 1, 2103. However, applied first to tax returns from 2009, he confirmed that it would only be utilized with the "maximum caution" and in the most "striking" of cases of differences between income and spending.

He also explained that the taxpayer would be given the opportunity to explain those differences, which will not immediately be assumed to be due to tax evasion, but due to other factors. Instead, the computer simulation will mean that there will, subsequently, be an obligatory dialogue between the taxpayer and the Revenue Agency.

At the same time, Befera also introduced the Agency's new online Redditest computer software which taxpayers will be able to use to auto-check the congruity between their declared annual income and family expenditure.

Taxpayer spending is arranged in seven overall categories including residence, travel, insurance and contributions, education, free-time pursuits, health, miscellaneous expenses, property and other net investments. The redditometro takes account of over 100 spending items, from cars, yachts and horses to movements in bank and savings accounts.

Befera stressed that the use of the software was confidential, being utilized on the family computer, without leaving any trace on the internet. It is meant to serve as a pointer for taxpayers to arrange their tax affairs, with the Agency being unable to intercept the data in any way. On completion, the test will show a green or red light.

TAGS: individuals | compliance | tax | business | tax compliance | tax avoidance | corporation tax | tax authority | internet | Italy | individual income tax

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