In the conference promoted today by the Revenue Agency on «Italian fiscal legality – Asymmetries and convergences with Europe», the international research program of the «Fondazione Bruno Visentini – Ceradi-Luiss» was presented in Rome which will compare different tax collection systems in Europe (“Tax Collection in the European Union”).
The comparison with other European legal systems seems extremely appropriate, to give a compass to the Italian debate on tax legality and on the fight against tax and social security evasion, which is full of contradictions. It is preached that they want to attack tax evasion but at the same time the severity of forced collection, embodied by Equitalia, is contested. A more decisive intervention is envisaged to stem the phenomenon, but in the meantime the tools that the State has given itself, through Equitalia itself, to discourage it are being ostracized. The words of the philosopher come back well: «Ignorance of remote causes disposes men to attribute all events to immediate and instrumental causes. For these are the only causes they perceive. This is why it happens everywhere that people burdened with paying taxes to the public unload their wrath on the tax collectors, that is, on contractors, tax collectors and other officials of public revenues…» (Hobbes, Leviathan, 1651).
Since 2006, by bringing the collection of tax revenues under state control, Italy has aligned itself with the major European systems. However, the action of the collection agency, Equitalia, is often opposed. It leverages intolerance towards the greater severity of its action, today more difficult to accept due to the objective economic difficulties faced by many taxpayers and the existence of legislation that is often complex and severe in sanctions. But the Revenue Agency and Equitalia, which is its direct expression, act on the basis of the regulatory system given by the legislator. This structure suffers from contradictions due to the stratification of rules over time, often the result of accidental instances. Hence the usefulness of starting a comparative and reasoned investigation, which can be of help to an attentive legislator who wants to intervene in the matter according to a general design, and not on a contingent basis, under the stimulus of protests. I will try to provide some food for thought below.
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In 2006, the state nationalized the public revenue collection system. The reform, conceived during the Visco ministry and implemented by the Tremonti ministry, removes from individuals the task of forcibly collecting taxes, social security contributions, fines, which have not been paid. Equitalia Spa was born, with public capital, under the control of the Revenue Agency. The intention is to make the collection apparatus less expensive and to collect more than private individuals, mostly banks, were able to do. The latter were also afflicted by some objective embarrassment: if a large debtor of the State is also a large debtor of the bank, which credit should be collected with greater, or less, impetus?
Equitalia inherits by law the private collection agencies, with their staff and all the unpaid credit stock. In just over a year, as many as 37 companies scattered throughout the national territory pass into public hands, with their dowry of directors, auditors, managers, employees, information systems (uneven). The Sicily Region adopts a similar model. In just over three years, Equitalia reorganized the group and the collection activity. The number of operating companies is drastically reduced; we went from 37 to 17 companies and then to just 3 (North, Central and South); an uncommon example of spontaneous reduction in the number of public subsidiaries and the related number of offices in the related corporate bodies.
Before the collection system was nationalized, the State allocated large sums to bear the costs. In the last years of the life of the private system (2005-2006) the total payment in favor of the tax collectors, by way of compensation, amounted to 470 million euros, for each year, only for tax collection. These sums, indicated by the law with the name of «supervision allowance», fell entirely under general taxation, i.e. they were charged to all taxpayers, whether or not they were recipients of the compulsory collection. The 2006 reform places the cost of the service at the expense of defaulters above all, rather than of general taxation. The supervisory allowance is first reduced and then, since 2009, completely eliminated. Who today disputes the so-called. collection fees that Equitalia collects from defaulting parties should be compared with the costs of the system when the burden fell entirely on the State, for about half a billion euros a year. It is ultimately a political choice: who should bear the cost of the collection?
With the nationalization, the legislator provides Equitalia with some incisive powers, such as direct communication to seize a credit from third parties. The rule is introduced whereby if a creditor of the public administration is also a debtor of Equitalia, he cannot be paid by the State until he settles his debt to the public collector (ie the so-called "registered" credit). The administrative detention of cars is made an effective tool to guarantee outstanding credits. Equitalia makes extensive use of it, such as mortgage registrations on debtors' properties.
The sums collected skyrocket. From 2006 to 2010, the volume of half-registered collections grew by 77%. Spontaneous collection is also growing; the perception that Equitalia is serious actually encourages voluntary compliance. The collection of credits registered in the register, which in 2005 amounted to approximately 5.1 billion, rose to 2010 billion in 8.8 (source: Court of Auditors, «2013 Report on the coordination of public finance»).
Equitalia is also called upon to manage an impressive program of deferred payments (so-called installments of bills), the extent of which the general public has little knowledge of. As at 31 December 2012, Equitalia guaranteed approximately one million eight hundred thousand deferred payments for a total of 21.8 billion in credits (source: Court of Auditors, based on Revenue Agency data). The management of similar processes, which among other things concern myriads of small parceled shares, presents understandable difficulties, entirely charged to the public company in charge of the collection.
The renewed vitality of the dormant collection system meets predictable resistance. The massive procedures put in place by the new public entity naturally lead to even higher percentages of errors. Some of these (such as the so-called crazy folders) are not at all attributable to Equitalia but to the incorrect indications provided by the creditors; or to objective uncertainties in the legislation, which is left to the jurisprudence to resolve in litigation and in the deputyship of the legislator. However, each payment folder bears the stamp of Equitalia and errors are inevitably attributed to the latter.
The crisis bites, and the political debate places on the agenda, rather than the reorganization of fiscal discipline and the strengthening of the fight against tax evasion, the downsizing of Equitalia. Every political party, without exception and albeit with different tones, has this point on its agenda. It is a program that meets with popular support and is therefore implemented.
Since 2010 various laws affect the powers of Equitalia, all in the direction of their decisive downsizing. Thus the State, that is Equitalia, unlike any other creditor, is deprived of the possibility of registering mortgages for credits of less than 20 thousand euros and must in any case notify taxpayers in advance of the registration. It can no longer seize, more than a fifth of their value, the capital goods of entrepreneurs, but not only when these are sole proprietorships, as established for all in the code of procedure, but also when it comes to joint stock companies. Equitalia can no longer expropriate, unlike private creditors, not only the residential house but also properties with a value of less than 120 thousand euros (with a valuation net of the encumbrances on the property already registered by the other creditors, not subject to the limitations of this type): a very large deductible, which protects the owners of even dozens of properties from expropriation, provided that all of them have a unit value below the threshold. The expropriation must in any case be preceded by mortgage registration and by the expiry of six months. Before proceeding with the registration of the administrative detention of the vehicles, he is obliged to send a communication to the debtor, even if he has already received the unpaid payment slip. In the presence of outstanding debts of up to one thousand euros, each precautionary and executive action must be anticipated by sending a further payment reminder (in addition to the folder already sent), with the need to wait 120 days from this sending before being able to proceed . The installment of debts is extended up to a duration of 10 years, and failure to pay up to seven monthly installments does not entail forfeiture of the benefit; the law also asks Equitalia to assess, in order to grant the favour, whether there is a "proven and serious situation of difficulty linked to the economic situation" on a case-by-case basis. It is easy to imagine the complexity of such assessments, if extended to millions of requests for extension. Finally, since 2012, the debtor who receives a payment notice but deems it to be any cause of "uncollectable credit" can apply for suspension to Equitalia, which is required to suspend any collection initiative until such has been sent to the creditor, has been examined and has finally received a response, to be communicated to the debtor. A considerable increase in procedures and times to switch to compulsory collection.
Even the Court of Auditors has recognized that these legislative innovations have "ended up by objectively weakening the compulsory collection of taxes". And in fact, from 2010 onwards, the Court has recorded a decline in collections. The negative trend is destined to increase, as an inevitable consequence of the crisis and of the legislative choices made in the last three years. All this, while in many quarters the exacerbation of the fight against tax evasion is being preached.
The differences in discipline that the comparative research will reveal will therefore also serve to raise the question of the reasons, the causes of the divergences. Is it a question of a different functioning of the institutions, of the use of different juridical techniques, or rather of cultural differences, of a different relationship between tax payers and the tax authorities, and more generally between citizens and the State?
Attachments: Befera: "Unbearable levels of tax evasion in Italy"
