The Magic Disappearing Tax

Italy in the spotlight again this week, with (unelected) Matteo Renzi in full flood of (unelected) government-forming. It's difficult to see how he can change the Porcellum (pig-sty) for the better with the dogs' dinner of a parliament that he has inherited from his unsuccessful predecessors, Mario Monti and Enrico Letta, which is most likely to tear itself apart if any real reforms seem imminent. But let's wish him luck. As an example of Italy's political incoherence we can point this week to the splendid piece of governmental incompetence displayed by the tax agency's announcement of a 20 percent withholding tax on monies received from "abroad," which it was forced to withdraw within 48 hours after the EU pointed out that it was illegal. That seems obvious: how can mandatory "withholding" be applied to cross-border EU transfers in a way … Read More »