CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Italy Boasts New Weapon In War On Evasion

Italy Boasts New Weapon In War On Evasion

by Ulrika Lomas, Tax-News.com, Brussels

22 March 2012


The Italian Revenue Agency’s Director, Attilio Befera, has announced that its new, revamped ‘redditometro’ – the computer data system which compares taxpayers’ income declarations with their spending habits – is now expected to be fully operational by June this year.

Befera has already pointed out that the Agency’s new ability to crosscheck taxpayers’ spending against declared incomes as the weapon that might win the government’s war on tax evasion. He has previously expressed the hope that, as taxpayers become more aware of the armoury now at the government’s disposal, they will be more willing to become tax-compliant voluntarily.

The ‘redditometro’ has been long in its experimental stage, but Befera explained that, as the system needed to be “sound and easy to use”, the Agency has wanted to take the time to make sure it worked well and there would be no problem when it finally went into operation.

It will look at whether a taxpayer’s declaration of taxable income is coherent with his or her overall spending capacity, as against the previous ‘redditometro’ which was based upon the possession of certain assets, such as yachts or large cars. The new system will be able to trace individuals' expenditure in more than 100 different categories to find disparities between spending and declared incomes.

The categories of spending are divided into seven areas. For example, under the category of housing are included first and second residences, mortgages, restructuring work undertaken, and furniture purchased; while information on a taxpayer’s social security contributions and insurance policies are also collected, as are recreational pursuits and a family’s education spending.

Spending capacity is based upon actual, not estimated, expenditure, and it is said that the system will be able to compare the data of over 22m families or around 50m individuals. The system’s methodology is also able to differentiate between eleven different categories of family unit including couples or singles and families with children, together with the region of Italy in which the taxpayer resides.

Most recently, simulations have been made by inserting typical taxpayer examples into the system. From the first results, it has been seen that, in many cases, the difference between the taxpayers’ lifestyle and declared income reached over 20%; the level which will, when the system is operational, mean a taxpayer will be contacted for further information.

In addition, it has been suggested that the ‘redditometro’ could also be extended to cover the taxable incomes of artisans and other individuals in business. In that case, the Agency could be able to discover, not only unpaid amounts of individual income tax (IRPEF), but also value-added tax, the regional tax on production (IRAP) and social security and welfare payments.

TAGS: individuals | artisans | compliance | tax | business | tax compliance | law | individuals in business | self-employment | Italy | individual income tax

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »