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Italy roots out 13,000 suspected tax cheats

Italy's financial police pressed charges against over 13,000 people for suspected tax fraud in 2014, more than half of whom were not declaring any income, a new report showed on Wednesday.

Published: 9 April 2015 08:30 CEST

Italy roots out 13,000 suspected tax cheats

Italy tax photo: Shutterstock

Nearly 150 people were jailed for tax crimes while officers seized goods worth a total of €1.2 billion ($1.29 billion) during related probes, the financial police yearly report said.

Tax evasion in Italy costs some €91 billion a year, according to the finance ministry – which equates to around six percent of national output in the eurozone's third largest economy.

In their fight against organized crime, police seized assets worth €3.3 billion and permanently confiscated others worth €733 million, which were then turned over to the state.

Over 900 people were reported on suspicion of corruption or bribing public officials, with 44 ending up behind bars.

Investigations into the grey economy found nearly 12,000 people working off the books and over 13,000 on irregular contracts, the report said.

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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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