Newspaper article The Christian Science Monitor

Italian Tax Hike Wins Points for Courage, but Not for Style

Newspaper article The Christian Science Monitor

Italian Tax Hike Wins Points for Courage, but Not for Style

Article excerpt

FINANCE Minister Giovanni Goria publicly apologized to the Italian people last weekend for the chaos and confusion surrounding a series of new taxes to help cut this year's projected deficit of $134 billion.

The unprecedented move was an embarrassing acknowledgement of the inefficiency and lack of preparation in imposing the new taxes, which have provoked anger and frustration among millions of citizens, threats of a tax boycott and possible strikes, and sharp criticism from media commentators and even the Vatican.

"The fiscal pressure on Italian taxpayers not only grows more burdensome on many fronts, but also becomes always more tortuous, chaotic, contradictory," wrote the official Vatican newspaper Osservatore Romano.

Mr. Goria's apology was triggered specifically by the confusion and popular uproar over how Italians are supposed to pay a new tax on passports and drivers' licenses - two of a series of new taxes which, all told, La Stampa newspaper estimated will cost the average Italian family about $900 by the end of this year.

The chaos over the new passport and drivers' licenses taxes came on the heels of similar chaos earlier this month, after the government announced a new real estate tax that must be paid by Sept. 30.

In cities across the country, Italians by the thousands lined up for hours in 100-degree weather outside real estate registry offices to try to find out details about how, when, and how much to pay - only to find out that little information was yet available.

"I'm sorry, but the new tax caught the financial administration by surprise," an embarrassed Giorgio Benvenuto, secretary-general of the Finance Ministry, said on nationwide TV.

These taxes are part of the broad package of belt-tightening economic legislation Prime Minister Giuliano Amato's government began to enact soon after its installation at the end of June.

THE measures - including such economic reforms as privatization of state enterprises, elimination of the 47-year-old wage indexation system, and public spending cuts aimed at saving $27 billion by the end of this year - were hailed by economists and other observers both in Italy and in EC partner countries. …

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