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Italian cabinet extends deductions

Letta says capital from abroad will increase tax revenues

24 January, 20:13
Italian cabinet extends deductions (ANSA) - Rome, January 24 - The Italian cabinet agreed Friday to preserve some tax deductions and also make it easier for Italians to repatriate capital currently invested abroad.

Prime Minister Enrico Letta said certain tax deductions that were scheduled to expire on January 31 will be preserved, affecting both families and business.

As well, victims of severe flooding last week around Modena in north-central Italy will have certain taxes suspended for a period.

But the most significant announcement involved a program to allow investors to repatriate capital that had been invested abroad, if they repay taxes owed in Italy.

The new program should yield extra tax revenues that Letta said can be applied to reducing labour taxes.

"It is not a shield," Letta said when asked if the new program amounts to an amnesty for tax dodgers.

The plan provides for "the full payment of taxes".

Tax evasion is a huge problem in Italy where, one day earlier, finance police announced they had found almost 52 billion euros of undeclared - and untaxed - Italian revenues in 2013.

The discoveries from last year included income and revenues that were earned by individuals and companies, but not declared to tax authorities, as well as false expense claims and other tax dodges, police said.

And just last month the head of Italy's inland revenue office, L'Agenzia delle Entrate, said that an estimated 130 billion euros is evaded annually in Italy.

About 15.1 billion euros that were not reported to tax authorities in 2013 came from international income including "transfers of convenience" to tax havens as well as foreign-based companies' income earned in Italy that is subject to taxation here, finance police said.

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