Italy Cracking Down on Tax Evasion

It’s long been a joke that tax evasion is like Italy’s national sport. Most good guidebooks will tell you what guesthouses will offer a lower price per night if you pay in cash (which they don’t have to report on their taxes) – and that’s just the part of tax evasion tourists are likely to see. Well, the current government in Italy is attempting to put a stop to this long-standing practice.

A new report cites more than €270 billion (yes, that’s billion with a B) in taxes that go unpaid each year, and the government has decided enough is enough. Some of the changes to the tax system appear to be working, but it will be hard to change the cultural attitude toward taxes with any sort of speed:

In Italy “there isn’t much stigma attached to being a tax evader, in terms of social condemnation,” said Carlo Fiorio, a professor of public finance at the University of Milan. In many cases, he noted, “if you pay taxes you’re seen as being a bit thick in the head.”

The owner of an office cleaning firm in Rome divides workers into two categories: “Those who are wily and don’t pay taxes, and those who are stupid and do.” He asked not to be identified, saying that although he belonged to the “stupid” category he would happily join the other “if I thought I could get away with it.”

Of course, it seems to me that someone in the government has to have been playing along with the game for years, or the following income levels would never have been accepted:

The figures showed that jewellers declared average annual earnings of 16,650 euros; restaurant owners 13,450 euros and estate agents 20,560 euros, while taxi drivers, who pay up to 200,000 euros on the black market for their licences, declare less than 1,000 euros a month.

Shoe sellers in the northern town of Bolzano appeared to set a record by declaring average earnings of less than 60 euros per month.