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Italians' Long Wait For Tax Freedom Over

by Ulrika Lomas, Tax-News.com, Brussels

29 June 2015


CGIA of Mestre, Italy's association of sole traders and small businesses, has calculated that it was only on June 23, after 173 days or almost six months, that middle-income Italian employees had paid all of their taxes and contributions for the 2015 tax year.

CGIA's calculations covered those individuals earning an annual taxable salary of EUR44,658 (USD50,000). Their tax payments were complete in exactly the same number of days as last year.

On the other hand, those employees earning an annual salary of up to EUR24,000, and therefore receiving the new income tax bonus, had already worked through their taxes and contributions by May 13, after only 132 days – one day earlier than last year.

In comparison, CNA (the national association of artisans and small and medium-sized enterprises) calculated recently that Italian businesses will have to work until August 14 to have paid off all of their taxes. Although very late in the year, that will actually be six days earlier than in the 2014 tax year.

CGIA has already noted, however, that taxpayers could face the prospect of even higher taxes this year if the local authorities feel they have to increase property or income taxes to shore up their finances, or if the Government is forced to hike value-added tax (VAT) or excise duty rates to compensate for revenue lost in other areas. Notably, the European Union has recently rejected the Government's proposed extension of the reverse charge mechanism to the retail sector, which could have reduced the impact on Italian finances of VAT fraud.

CGIA's General Secretary Giuseppe Bortolossi has said the best way to cover any revenue shortfall and to reduce tax burdens would be through a reduction in "unproductive public spending."

TAGS: individuals | compliance | tax | business | value added tax (VAT) | tax compliance | employees | excise duty | Italy | tax breaks | retail | individual income tax | Europe

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