In yet another attempt to harness widespread dissatisfaction with Prodi’s government, Umberto Bossi – leader of the Lega Nord party, has made calls for a fiscal strike, or to put it another way, tax evasion.
The calls for a fiscal strike were augmented by last year’s budget which raised taxes in several areas under the prextext that the Italian economy was in seriously bad shape after five years of Berlusconi rule – a claim that sounded slightly weak given that soon after the tax raises a whole range of economic indicators sang positively, and that the dept. of finance discovered it had a mini-surplus on its hands through some oversight.
The call for the fiscal strike though remains at a soundings level. Declarations are made in public, and then denied by the self-same parties. Bossi’s call last week for a fiscal strike was immediately followed by a statement from Roberto Calderoli stressing that the Lega weren’t calling for a strike per se, but rather “a protest along the lines of the ‘tea protests’ organised by the English colonies against the crown”.
What form the Lega Nord’s ‘Tea Party’ will take is still open to much discussion. It seems that both Bossi and Berlusconi are keen on the idea of a tax protest as the best way to cripple this government, while their political partners the post-fascist Alleanza Nazionale party are against – after all, if you’re a heavy-handed ‘law and order’ party, it’s hard to reconcile such disobedience.
The debate, which has been going on for months, seems more than a little abstract. Italy, after all, has one of the highest rates of tax evasion in Europe – amounting to up to 27% of GDP according to estimates. The lesson – Bossi and Berlusconi are preaching to the converted.
Prodi’s government are being backed in their fight against tax evasion by an important foreign ally – the Vatican. Speaking at a conference in Rimini, the Vatican’s Secretary of State, Cardinal Bertone, said that “We must all do our duty paying taxes, according to just laws that allocate funds to just works and to the poorest and weakest in our society”[2].
Leaving aside the question as to what reaction the Italian press would have should an official of any other state – let’s say Ireland’s Brian Cowen, for an example – were to make a similar declaration, it’s interesting to see a new Vatican line emerging on tax evasion.
Rumour has it that Pope Benny is working on a doctrinal pronouncement against tax evasion[3]. Interesting given the Vatican’s shady banking dealings during the days of Roberto Calvi and the Banco Ambrosiano (see the latest edition of Three Monkeys for an interview with English journalist Philip Willan, who talks at length about Calvi and the Vatican). In a nutshell, during the late 1970s and early 1980s, against a backdrop of social unrest and the fear that a left-wing government would take power, a massive transfer of wealth occured with rich Italians funnelling money out of the country (illegaly) to off-shore havens where it would escape any wealth-taxes. One of the escape routes for this fleeing capital? Well, the Vatican bank was handily located in a foreign state in the heart of Rome…
The other interesting element of the Church position on tax evasion is the fact that the Church has a special exemption on property tax in Italy – which is one of the taxes causing the biggest uproar. Well and good that places of worship are exempt from property tax, perhaps, but it should be remembered that the Church has huge property holdings across the spectrum in Italy – it’s been estimated that one in five buildings in Rome is owned by the Vatican[4], and this includes hotels, commercial properties, and a large amount of buildings leased out to tenants.
1. ‘Sciopero Fisco, Berlusconi apre alla Lega’ – La Repubblica 18/08/2007
2. Sciopero Fiscale, Monito di Bertone – La Repubblica 20/08/2007
3. ‘Pope condemns socially unjust tax evasion’ – Independent 11/08/2007
4. In Rilievo – citing a report by Sandro Orlando in il Mondo