IOn the subject of taxation, rejection for the VAT increase, for the hypothesis of reducing or eliminating Irap, for the methods of revaluation of cadastral income, for how the fight against tax evasion was conducted. These are the criticisms of the former minister Vincenzo Visco, heard by the Senate Finance Committee on the tax reform. In general, Visco highlights the structural differences between the Italian tax system and those of other European countries, starting with the "high extent of evasion and the imbalance on income tax". And then he goes into detail.
VAT
The former minister does not consider the recent increases in the ordinary rate acceptable. "The possibility of neutralizing the second increase expected for the end of 2012 could be evaluated - he suggests -. To this end, the greater resources deriving from the reduction of tax breaks could be used".
IRAP
Dissenting from those who have proposed the reduction or elimination of the regional tax on productive activities, Visco explains the reasons which - in his opinion - make it "preferable to keep Irap: Irap revenues help finance the health sector and the erosion of its tax base would create unequal treatment”. Referring to the cost of labor and the tax wedge, he therefore deems it preferable to unify the levy rates at 27 or 28 percent, with a cost of between 8 and 10 billion euros. “This could reduce the tax wedge by about 3 percentage points. This intervention could be financed by strengthening environmental taxation and restoring the tax on greenhouse gas emissions and on fossil fuels, the so-called carbon tax".
Companies
econdoVisco "there is a lack of coordination between the taxation of personal businesses and that of corporate businesses", which suggests on this chapter: "One can evaluate the hypothesis of modifying the taxable amount of this tax, also including depreciation and reducing the rate, so as to transfer a part of the levy from labor to capital. The other reductions and facilitations introduced should also be eliminated and the tax should be redesigned as a tax on the use of production factors, calculated on the basis of the gross added value of each of them".
Real estate
Visco points the finger at "some problematic profiles in the field of property taxation", above all as regards the differences in treatment inherent in the methods with which the revaluation of cadastral income has been carried out. “It could be aligned more – he says – with market values, creating the possibilities for a reduction in the IMU rates and pending the land registry reform.
Capital income
The former finance minister hopes that a reflection can be launched on a radical change in taxation, which assumes invested capital as the taxable base.
Evasion
Remarked that "the level of tax evasion is a serious anomaly of the Italian system and therefore represents an authentic mass phenomenon" Visco does not fail to point out "the substantial ineffectiveness in the fight against evasion of the control instruments introduced in recent years such as the income , which runs the risk of turning into a tool for mass inspections, and the spesometer, which has resulted in a further formal burden for businesses”. And therefore it indicates a series of control tools that it would be possible to restore or introduce for the first time in the legal system:
1) the dissemination and extension of electronic tools, 2) the reintroduction of the customer-supplier list, 3) the telematic transmission of the fees in the retail trade or in vending machines 4) the limitation of the use of cash. “The payment limit set at 1.000 euros certainly pursues important purposes of combating money laundering, but - claims Visco - it is not very effective in the fight against tax evasion, since most of the transactions have a unit value lower than this threshold and can easily be split into several payments”. Not only that: for Visco, there is also a need for greater integration between tax databases and action to correct some critical issues that have emerged in the functioning of sector studies, avoiding the effect of a cadastisation of income and the risk of transforming it into a sort of flat-rate tax.
