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Record in Italians signing up to pay tax

A record number of Italians signed up to pay their taxes last month, thanks to a revamped system, the threat of fines and taxpayers' positive attitude, one expert told The Local.

Published: 18 August 2014 15:05 CEST
Record in Italians signing up to pay tax
Money photo: Shutterstock

A total of 156,000 asked to start payment plans in July, with weekly sign-ups during the month double the average for the first six months of 2014.

The uptick comes after Equitalia revamped its system, making it easier for Italians to pay their debts, the tax collection agency said.

Roberto Diaferia, a Milan-based tax adviser, agreed the change has had an impact: "The possibility to pay taxes with installments has been greatly appreciated because the procedure has been simplified, it can work almost automatically."

Equitalia steps in one or two years after Italians have failed to pay their taxes, with people invited to pay immediately, within 60 days or request a payment plan, Diaferia said. 

"There is also the possibility in the plan to miss payments eight times before it is revoked," he said, making it more flexible for people who may be struggling financially.

A total of 2.4 million instalment plans have been set up with Equitalia so far, with a total value of €26.6 billion. The majority of these – 70.8 percent – of these are for small sums of less than €5,000. Just over a quarter (26.2 percent) are for tax bills ranging from €5,000 to €50,000, while 2.9 percent are for those who owe more than €50,000.

The payment plans have proved most popular in the northern Lombardy region, where Italians have agreed to pay €5.5 billion through 385,000 accounts. Lazio came second, with 305,000 accounts amounting to €3.7 billion.

SEE ALSO: Italians are Europe’s worst tax-dodgers

Despite Italians being reputed as Europe’s worst tax dodgers, Diaferia told The Local most people are keen to pay their bills.

"I work in Milan and as far as I can see the attitude to paying taxes has always been positive," he said. "Many people prefer to delay but they do not want to avoid paying taxes.

"You can divide tax dodgers in two. There are 'necessity' tax dodgers, small companies and all the people who are obliged not to pay or delay in order to pay employees and suppliers. Then there are the tax fraudsters, this is completely different."

The Italian government has recently stepped up efforts to see citizens pay their way. In January the financial police said 12,726 tax evaders had been reported in 2013, up from 11,769 the previous year. More than 8,000 people paid no taxes last year, running up a bill of €16.1 billion, while other forms of tax evasion cost the state €20.7 billion.

READ MORE: More Italians are dodging tax: police

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TAXES

Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Published: 30 October 2023 15:21 CET
Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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