Rome

Audit Court complains of contradictions in tax-evasion war

Says new cross-checking system won't solve problem

Audit Court complains of contradictions in tax-evasion war

Rome, June 3 - Italy's Audit Court said Monday that the war on rampant tax evasion has been hampered by contractions in past governments' approach to the problem. "Fighting tax evasion continues to be a central, essential part of the effort to restore health to public finances," the Audit Court said in a report. "But the strategy adopted during the last parliamentary term was affected by contradictions and lapses of focus". Both Silvio Berlusconi's third government, which ran from 2008 to late 2011, and Mario Monti's emergency technocrat administration, which ruled from the end of 2011 until April this year, said fighting tax evasion was a priority. But Berlusconi's People of Freedom (PdL) complained that the tax agencies got carried away under Monti and treated many honest taxpayers as criminals during audits. The Audit Court also said that the power of a new system that the inland revenue agency is using to detect tax dodgers, by cross-checking declared incomes with spending and bank-account transactions, had been exaggerated. "The media clamour caused by the new mechanism to recreate incomes appears frankly to be out of proportion to the tool's potential and its presumed effectiveness," the report said. It added that measures such as the registration of all operations over 3,600 euros risked depressing consumer spending and increasing the number of transactions paid cash-in-hand to avoid taxes.

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