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.

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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Switzerland and Italy hope to deliver cross-border worker tax deal ‘by 2021’

Switzerland and Italy have pledged to conclude a long-awaited tax arrangement for cross-border workers by the end of the year.

Switzerland and Italy hope to deliver cross-border worker tax deal ‘by 2021’

At a meeting in Rome between Swiss President Simonetta Sommaruga and Italian Prime Minister Giuseppe Conte, the two leaders said progress was being made on a cross-border tax arrangement. 

The agreement, originally negotiated in 2015, has as yet not been signed by either state. 

READ: How Switzerland avoided a coronavirus 'catastrophe' by protecting cross-border workers 

A 1974 agreement between the two countries doesn’t define cross-border worker. 

Sommaruga praised Switzerland’s decision to reject an initiative which would have restricted migration from EU countries and perhaps had impacts on cross-border workers. 

“In last Sunday's referendum, the Swiss people once again said that they want the free movement of people. It is a good thing for our country but it is also a good thing for the whole of Europe,” she said. 

“With neighbouring countries, Switzerland has adopted a regional approach excluding border regions and also cross-border workers from the quarantine regime. 

“I hope we can continue like this.”

While Switzerland rejected the migration limitation initiative, Ticino was one of four of Switzerland’s 26 cantons to vote in favour. 

Conte told reporters he hoped a deal was concluded “as soon as possible” and hoped it would be concluded by 2021. 

Conte hailed Italian cross-border workers as essential to the health system in the southern Swiss canton of Ticino, particularly during the coronavirus pandemic. 

READ: How Switzerland's cross-border workers are growing in number 

In the canton of Ticino, one in five healthcare workers lives over the border in Italy – approximately 4,000 people. Ticino’s population swells from approximately 360,000 people to 440,000 during an average work day due to cross-border workers from Italy.

Unlike with Italy, Switzerland has struck a tax deal for cross-border workers from neighbouring France, which was amended during the coronavirus pandemic.