The lively duo of Dolce and Gabbana have become the poster children for the scourge of Italy's economy. Together with graft and bureacracy, the third thirsty vampire that empties the country's coffers is tax evasion.
The super-rich in Italy have always skirted the fiscal responsibilities that go along with their wealth. In the years before foreign bank holdings and accounts became legal, billion left the Italian banks for more favorable and secure accounts abroad, usually in foreign currencies. Rich people have avoided the system for decades, and now they have reached new levels of sophistication when hiding their money.
More than a trillion dollars have been lost to tax evasion in the past 13 years, a sum that alone could shore up the creaking Italian economy and then some. Some of these evaders have been caught, like Dolce and Gabbana, but it is a small fraction of the motherload.
The Italian government is pursuing almost everyone, retroactively, going back more than a decade to the year 2000. They are turning stones and looking just about everywhere, reaching far back to try to recuperate that money at a time when the country badly needs cash. In some cases, their search will result in over-zealousness, but generally, there will be plenty of dirt for them to uncover.
In addition to the search for tax evaders, the government has implemented draconian taxation measures, some so abstruse that some Italians have come to say that the air they breathe will be the next target of taxation. The burden of taxation on the middle and lower classes in Italy has depleted even the fattest accounts. The government knows that it is only a matter of time when those taxes will go unpaid. Hence the energetic search for offshore and tax evasion monies.
In addition to the search for tax evaders, the government has implemented draconian taxation measures, some so abstruse that some Italians have come to say that the air they breathe will be the next target of taxation. The burden of taxation on the middle and lower classes in Italy has depleted even the fattest accounts. The government knows that it is only a matter of time when those taxes will go unpaid. Hence the energetic search for offshore and tax evasion monies.
The answer then is to pursue leads everywhere, in the hope of catching the big fishes, but the little ones might not be spared. The government, furthermore, has signified that such tax evasion is one of the main obstacles to the country's recovery, thereby justifying the energetic search.
Just this week, Standard and Poor has downgraded the country's rating to BBB, from BBB+, a rating not too far from junk status. If things do not turn around soon, the country will face a very uncertain future.
Op-ed
Op-ed
Partial Source: Xinhua/ 7.11.13
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