The newest Italian Tax Amnesty Program has been written into law, yet is judged to be a risk to the country by Fitch Ratings.
Italy, which according to an Associazione Contribuenti Italiani and Klrs Network of Business Ethics survey has EU’s highest levels of tax evasion, has approved its third tax amnesty program in eight years. The 2nd of October saw the Italian parliament pass the tax amnesty proposal with 270 affirmative and 250 negative votes. It was signed into law by Giorgio Napolitano, President of the Italian Republic, on the 3rd of October.
The tax amnesty program proposed to allow the repatriation or relocation of offshore held funds with protection from prosecution, in exchange for a 5% fine on the value of the funds. Governmental estimates have placed the possible value of repatriated wealth at €300 billion, although, national private bankers have settled on a gloomier figure of €50 to €100 million.
The tax amnesty program could prove to be a risky move for Italy in the medium-term, according to statements released by Fitch Ratings on October 6th. Brian Coulton, Fitch Ratings Head of European and Middle East sovereign debt and global economics, said “The repeated tax amnesties risk damaging the tax culture and are detrimental to fiscal performance. It risks undermining the improvement in public finances in 2006 and 2007 which were achieved by an improved tax to GDP ratio.”
Opposition to the tax amnesty program claim that it will serve as a reward for organized crime and illicit tax behavior, as it grants anonymity and some protection further prosecution crimes related to the account.
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