The Italian government can’t believe their luck. As they struggle to survive economic downturn, their tax amnesty plan has provided a bumper crop with 95 billion euros declared and a tax windfall of five billion euros for the government.
It’s well beyond forecasts and the yield has boosted the Italian banking system. So much so that the government has decided to extend the amnesty to the end of April hoping to reel in a further 30 billion euros.
The December amnesty allowed Italians to declare illegally held assets with just a one-off 5% tax. The government has now offered a 6% tax on declarations before the end of February, and 7% by the end of March.
Alessandro Plateroti of the economic journal Il Sole 24 Ore said: “Most of the cash so far has come from bank accounts of 10 to 20 million euros. That means tax evasion is not only by big players but also by small and medium size businesses, who, dodge the Italian tax system and bank their money abroad.”
The amnesty has led to tensions with neighbouring Switzerland. Italy put the country on a blacklist for not cooperating and police and tax inspectors have raided dozens of Swiss banks in Italy.