Police raids highlight Italy's fight against tax evasion

Mon Feb 6, 2012 3:10am EST
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By James Mackenzie

ROME (Reuters) - The two-man workshop close to the Vatican had been busy when tax police raided it last week, seizing about a million religious articles and souvenirs ranging from rosaries to images of Pope John Paul II.

"It was a pretty substantial operation," said Lieutenant Colonel Davide Cardia of the Guardia di Finanza in Rome. "Let's say an average of 10-12 euros an item, multiplied by a million. It gives you some idea of the sums involved."

The raid on the illegal workshop serving the cluster of tourist shops and street vendors around the Vatican was only one of a series across Italy in recent weeks, the highest profile of which was a swoop in the chic Alpine ski resort of Cortina.

As well as the Cortina operation, which caught numerous Ferrari owners apparently earning less than 30,000 euros ($34,000) a year, police have descended on nightclubs and bars in Milan and shops in Rome where fewer than half were issuing proper receipts.

The high profile operations have drawn accusations from parties including the centre-right PDL of former Prime Minister Silvio Berlusconi and the regional Northern League that tax officials were showing off and targeting hardworking businesses.

"There's been a big reaction to these operations but to be honest, we and the Guardia di Finanza have always conducted them," said Marco di Capua, deputy director of the Agenzia delle Entrate, Italy's main tax collection agency.

All Italian governments routinely pledge to fight tax evasion, often budgeting for billions of euros in hoped-for revenues well before they materialize, but it has proved impossible to stamp out.

And as Prime Minister Mario Monti struggles to repair Italy's strained public finances, the perennial fight against tax evasion, a phenomenon estimated to be worth some 120 billion euros a year, has taken greater prominence.   Continued...