€95 Billion Yielded in Tax Amnesty

December 30, 2009 Taxation in Italy

TREMONTI GiulioIn excess of €95 billion of previously undeclared assets, almost €15 billion more than initially anticipated, have been disclosed to the Italian government in the country’s latest tax amnesty.

Assets worth nearly 6 percent of the national GDP have been declared by Italian nationals during the tax amnesty, and 98 percent of the amount has already been transferred back to Italy, mainly from offshore tax havens. The successful result of the controversial tax amnesty was announced in a statement of Economy Ministry on December 29th. This was the fourth, and, so far, most successful tax amnesty program initiated by the Government on September 15th, 2009.

The tax amnesty provides an opportunity for Italian nationals to disclose their undeclared assets in exchange for a reduced to 5 percent penalty and protection from criminal prosecution. The Government is expected to receive nearly €5 billion in penalty payments. The amnesty is scheduled to expire on April 30th, 2010, though the penalty rate charged will rise to 6 percent on declarations made between January 1st and February 28th, and 7 percent for the remanding months of the program.

From its early stages, the tax amnesty has been widely debated in political ad social circles, and, despite the fact of its great monetary success, there is still no unified view on the program in Italy’s society. Giulio Tremonti, Finance Minister of Italy, commenting on the currents results, said “This has been an enormous success and is a sign of our economic strength and of faith in Italy and also of our intelligence”. However, the fiscal gain benefits of the program were dismissed on moral grounds by Antonio Borghesi, one of the leaders of Italy’s left-wing Party of Values, who stated, “Rather than giving new oxygen to Italy’s economy it’s an injection of money from the fruits of tax evasion and illegal activity”.

Photo by Giuseppe Nicoloro