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Tuesday 20th March 2018

Italian Financial Manoeuvres: Manipulation and Blockage


Roberto Tumbarello - 7Dnews Rome

Thu, 18 Oct 2018 14:29 GMT

Mystery surrounds the financial manoeuvres approved by Italy’s Cabinet. The published text is different from the one issued by the government. The Minister of Economic Development and Labour, and leader of the M5S, Luigi Di Maio, has turned to the Public Prosecutor's Office, filing a complaint against unknown persons for tampering with the decree. It is the first time such an event has happened in Italy – and certainly not elsewhere – in the 72 years of democracy since the foundation of the Republic.

The mistake concerns the amnesty – one of the three measures contained in the state budget document – that the government has baptized "fiscal peace", because not all those who are of questionable standing are entitled to it. The provision is for payment facilities for the 10 million tax payers who submitted a tax return, but who did not have the opportunity to pay the tax due to lack of money. The facility is not open to tax evaders, i.e. those who have not even filed their tax return.

Those who had no opportunity to make the payment, despite having complained – that is, about a third of taxpayers – can remedy the situation with the tax authorities by paying 20% of the amount due. This subsidy is permitted only to those whose debt to the tax authorities does not exceed 100 thousand euros. This is – according to Luigi Di Maio – the decree approved by the Cabinet.

Instead, in the published text, which was about to be transmitted to the Quirinale for the approval or observations by the President of the Republic, two other clauses have been inserted, which the M5S party disputes and renounces. These concern first the impunity of those who report overseas earnings and capital and, second, those who wish to transfer to Italy income from any source, even money that has been laundered.

This is the subject of the complaint filed with the judicial authority for manipulation carried out by persons unknown, supposedly disloyal officials, acting on behalf of those who oppose the government of the League and 5 Star Movement, i.e. the traditional parties that were beaten in the elections of last March.

The opposition, however, argues that it may be the long arm of the League, which has long insisted on expanding the boundaries of those affected by tax legislation. In recent days, there has been a lot of tension between the two movements. One, the M5S, are against tax evaders. The other, the League, being more permissive, host the largest number of evaders in their northern heartlands.

Several lively discussions among the majority preceded yesterday's Cabinet meeting, characterised by heated controversies that threatened to shatter relations and bring about the fall of the government. Finally, Di Maio and his M5S defenders of honesty and transparency, got the upper hand. Threatened with disclosure of their complacency towards tax evaders, the League gave in.

In the decree – which also includes the possibility of retiring at age 62 with 38 years of contributions, and the income of citizenship, to meet the six million poor – is the promise of prison for those who hide their income tax. This was the measure that the League did not want but, eventually, had to accept. It marks the first time that tax evasion in Italy is considered a criminal offence. That is why the opposition – the parties on the left, as well as those on the right, together – claim that the addition was carried out by the League and that the M5S noticed it only after criticism was made.

The decree was blocked by the Premier, Giuseppe Conte, and purged of the part concerning impunity and income of dubious provenance. From today, October 18th, the Public Prosecutor's Office will open an investigation to identify those responsible for the changes.