Italy tax amnesty yields record €80bn
by Guy Dinmore in Rome
Italy’s amnesty for tax evaders holding funds outside the country has been successful in attracting more than €80bn so far, Giulio Tremonti, the finance minister, declared on Wednesday in setting out a record haul for the centre-right government.
“I want my money back,” Mr Tremonti said, breaking into English at his year-end news conference, recalling what he had recently told Hans-Rudolph Merz, his Swiss counterpart, to the anger of Swiss banks, which hold the majority of Italian funds and have accused Rome of intimidating their clients.
The figure, equal to about 5 per cent of gross domestic product, sets a record for an overseas tax amnesty for Italians. It also confirms Italy as the European league leader in successful tax amnesties, thanks to the generous terms and anonymity offered. Protests from Swiss banks notwithstanding, most of the money is likely to remain abroad, as Italians are not obliged to repatriate their funds.
The Bank of Italy estimates that Italians hold some €500bn ($718bn, £450bn) in undeclared funds outside the country.
A 2002-03 amnesty granted by Silvio Berlusconi’s previous government uncovered €78bn. But a subsequent amnesty for tax evaders with money inside Italy resulted in more than €100bn declared.
“The days of fiscal havens are over,” Mr Tremonti said, putting his campaign in the context of a global crackdown by the US and other leading nations. Future relations with Swiss banks must be based on an end to banking secrecy, he added.
The three-month amnesty had been due to expire on December 15 but has been extended until the end of April because of a late rush in applicants.
The 5 per cent penalty levied – a relatively small amount compared with European norms – translates into a Christmas windfall of more than €4bn for the cash-strapped Treasury.
Mr Tremonti defended the amnesty as “ethical”, despite criticism by anti-Mafia prosecutors and opposition politicians that its anti-money laundering provisions were weak and that Italy was unique in offering anonymity.
Mr Tremonti declined to say how much money had actually returned to Italy, a crucial element in the government’s argument that the amnesty would boost an economy forecast to contract by 5 per cent this year.
Tommaso Di Tanno, who is, like Mr Tremonti, well known as a tax lawyer, noted that previous amnesties had failed to repatriate a majority of the capital declared and expects a similar result this time. “Most of this wealth did not come back,” he said.
Although the amnesty provoked a crisis in relations with Swiss authorities, Mr Di Tanno predicted that most funds would either stay in Switzerland or quickly return there after being “regularised”. He also doubted that financial intermediaries would exercise “particular scrutiny” in checking for possible money laundering.