21 August 2012

Italian tax inspectors could be checking out your sun lounger this summer

Italian tax inspectors crack down on on beach hire businesses thought to be evading tax. Owners of luxury cars and yachts challenged to demonstrate tax status.

But despite the fact that they've been working "undercover” in casual clothes, they're not taking it easy relaxing in the sun, they're making sure the operators who hire out umbrellas, sun loungers and changing cabins are handing out receipts and not evading tax.

This is the latest development in the campaign headed by Mario Monti, the Italian Prime Minister who declared "a state of war” against tax evasion, saying: "Tax evasion badly damages the perception of Italy abroad”.

The Guardia di Finanza, the Italian tax police have been targeting owners of Ferraris, Lamborghinis and other top end sports cars trying to identify the earnings and tax paid to enable the owners to buy such luxury goods. Mr Monti said "There are rich Italians who systematically do not pay their taxes.”

The tax police have also been boarding boats held in Italian ports and marinas but have been met with a mass exodus from Italian marinas with an estimated 30,000 yachts having left. Apparently Slovakian marinas are now getting rather full.

The black market economy in Italy is estimated to be worth €275 billion a year or 17.5% of GDP so getting it under control would be a significant step in the right direction for a country with a €1.9 trillion public debt.

It will be interesting to see if British holidaymakers are impressed with receiving a receipt for their sun lounger hire, the high cost of which being one of the most complained about feature of overseas holidays according to a recent survey by YouGov. The cost of food at tourist attractions and heavy mobile phone charges overseas (especially data charges) also attracted criticism.

Other complaints related to the high charges for using debit or credit cards abroad and charges for using cash machines, the good news is that many of these charges can be avoided by following MoneyMaxim's advice to get cash cheaper when abroad and getting the best travel money rates when taking cash.