Berlusconi promises to hand back €4bn in property tax payments if elected

Mon, Feb 4, 2013, 00:00

Former Italian prime minister Silvio Berlusconi struck a familiar electoral campaign note yesterday when he promised that, if elected, his government would not only abolish the highly unpopular property tax IMU, but that it would also refund €4 billion worth of the tax paid by Italians last year.

Mr Berlusconi, who says he will serve as finance minister in a government led by his party secretary, Angelino Alfano, unveiled his eagerly anticipated “electoral shock” at a carefully choreographed PDL (centre-right People of Freedom Party) rally in Milan. Saying he wanted nothing for himself but that he wanted to fight this “last electoral battle” for freedom in Italy, Mr Berlusconi argued that the heavy taxation of the outgoing government of technocrat Mario Monti had led Italians down a “blind alley”.

What was needed was a “symbolic but very concrete act” that would restore the faith of Italians in their state. To that end, the first cabinet meeting of a future PDL government would abolish IMU and reimburse everyone who had paid it last year.

Covering cost

Even though IMU was introduced in March 2011 by Mr Berlusconi’s government, the measure was significantly toughened and extended by Mr Monti in December 2011. It has been estimated that it yielded €23 billion last year.

Mr Berlusconi says that the cost can be covered in two ways. First, he hopes to come to an agreement with Switzerland whereby Italian citizens with business activities there would make a one-off tax payment worth €25 billion, to be followed by annual tax returns of €5 billion.

Second, spending would be cut by €80 billion by reducing the “cost of politics” – halving the number of parliamentarians (there are 945) and abolishing public funding of political parties.

Responding to the proposal,Mr Monti said that Mr Berlusconi “has never maintained his electoral promises . . . something Italians have not forgotten”. Anna Finocchiaro of the Democratic Party tweeted that this was “the usual mix of demagogy, unrealistic promises and lies. But, nobody in Italy believes him anymore.”

Centrist Pier Ferdinando Casini said the promises had “a credibility rating of zero”. Weekend opinion polls put the centre-left coalition forces led by the PD at 34 per cent, five points clear of the PDL-led centre-right on 29 per cent.