Tax

Italy's Technocrat Govt Stirs Up Controversy In Tax Raids On Wealthy

Tom Burroughes Group Editor London 9 January 2012

Italy's Technocrat Govt Stirs Up Controversy In Tax Raids On Wealthy

Mario Monti, head of the Italian government who also serves as finance minister, has defended a tough crackdown on tax evaders in luxury ski and coastal resorts, rejecting angry reactions from leading members of Silvio Berlusconi’s centre-right party whose support in parliament is vital for Italy’s new government of technocrats, the Financial Times reports.

Finance ministry tax police followed up a well-publicised New Year raid on Cortina D’Ampezzo in the Dolomites with unannounced inspections over the weekend in Porto Fino on the Ligurian coast and other exclusive retreats, the report said.

The swoop by 80 tax inspectors on Cortina targeted bars, hotels, luxury shops and expensive cars. Of the 251 “super cars” checked, 42 were found to be registered with people declaring annual incomes of less than €30,000 (around $46,280), while 19 were owned by companies that had declared financial losses.

Italians evade around €120 billion in tax a year, according to Istat, the national statistics agency, a significant part of a black economy that accounts for at least 17 per cent of GDP.

Some €11 billion in unpaid taxes was recouped in 2011. Monti’s government has set a target of €13 billion for this year, as it raises taxes and cuts public spending to cap Italy’s public debt mountain of €1.9 trillion.

The crackdown can be seen as part of moves by several European governments – such as those of France and Spain – to target wealthy individuals in a bid to raise revenues. Meanwhile, there was media speculation that UK finance minister George Osborne may further delay any move to scrap the current 50 per cent top income tax rate on incomes of £150,000 and above.

In its Italy story, the FT said leading officials of the centre-right People of Liberty party led by Berlusconi have accused Mr Monti’s government of “demonising wealth”. Ignazio La Russa, former defence minister, called the swoop on Cortina “just a show”.

 

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes