Italy Doubles Taxes Still IDR 3.4 Billion, Incentives For Rich People

Florence Italia/ILLUSTRATION OF UNSPLASH/Jonathan Kryptor

JAKARTA - The Italian government approved a decision to double the remaining tax of 200,000 euros (218,220 US dollars or equivalent to Rp3.4 billion) per year applied to income earned abroad by the wealthy who moved their tax residence to the country.

Reported by Reuters on Wednesday, August 7, the incentives introduced in 2017 aim to lure the rich to Italy in the hope that it will benefit the economy.

However, Economy Minister Giancarlo Giorgetti told Italian journalists he now opposes the idea of countries competing with each other to offer fiscal assistance to the rich.

The government's decision may also make a small contribution in strengthening Roma's public finances when Prime Minister Giorgia Meloni prepares a 2025 budget aimed at narrowing the country's large fiscal gap.

One of the great beneficiaries of this scheme is Portuguese football star Cristiano Ronaldo, who moved his tax residence to Italy between 2018 and 2021 when he played for Juventus.

Giorgetti said about 1,186 taxpayers had taken advantage of the fixed tax, while the Italian audit court estimated between 2018 and 2022 taxes paid under this scheme amounted to 254 million euros.

The European Union criticized the move as unfair and detrimental to state accounts.

The regime of people with high net worth in Greece and Italy is... the most dangerous because they offer huge exceptions to very rich people," the Tax Observatory said in this year's Global Tax Avoidance Report.