Rome

Showdown looms within split govt over IMU tax

'If we fall, everyone has to pay tax' warns premier

Showdown looms within split govt over IMU tax

(By Christopher Livesay) Rome, August 12 - The embattled parties that make up Italy's coalition government continued to trade jabs Monday over the controversial IMU property tax that threatens the stability of the fractious executive. Abolishing the tax was a key plank in the political platform of three-time premier Silvio Berlusconi, who rallied to second place in February elections to force an uncomfortable alliance between his center-right People of Freedom (PdL) party and the majority Democratic Party (PD) after two months of parliamentary gridlock. The PdL has threatened to pull its needed support from the government if their campaign promise is not upheld, while in the meantime IMU payments have been postponed through September as part of a stopgap truce. Speaking in Azerbaijan on Sunday, Letta said that pulling the plug on the government would only ensure that IMU stays in place since "you need both a government and parliament in order to make reforms". Regional Affairs Minister Graziano del Rio, from the center left, said the government "will find a solution" but would not fold to the PdL's call for an outright ban, something that Letta "has never talked about," according to the La Repubblica daily on Monday. PdL House whip Renato Brunetta disagreed. "Judging Letta's statements...it's clear that the IMU tax on primary residences will be abolished and that there will be a comprehensive reform of taxes on real estate," Brunetta also told La Repubblica. Civil Service Minister Gianpiero D'Alia, seen as a moderate, argued Monday that IMU should be eliminated at least for middle-class families, which "is now in a state of unbearable taxation". When the current coalition government was formed last spring, there was a promise to eliminate the tax, claimed D'Alia, a member of the centrist UDC party and a former deputy secretary under Berlusconi. Letta on Monday pledged once again that the issue will be resolved by the end of the month to cool the firestorm sparked last week by Economy Minister Fabrizio Saccomanni. In a list of nine hypothetical reforms, the former deputy governor of the Bank of Italy said it would not be fair to eliminate IMU, and to do so would cost the government 2.426 billion euros in revenue in 2013. "The proposed exemption of IMU for primary residences does not seem fully justified in terms of fairness and efficiency," said Saccomanni. Pierpaolo Baretta, economy undersecretary, suggested the whole debate may be resolved by changing the tax's name, for the second time. "It's safe to say that if the government lasts, IMU payments for September will be waived, and by December, the hypothesis is to introduce a new tax by a different name," he said.

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