“Redditometro: Understanding the Impact of its ‘Fake Farewell’ on economy and politics”

Saying Goodbye to the Redditometer: Salvini’s Victory?

Rumors spread about the definitive farewell to the Redditometer, but no statement from Palazzo Chigi or the Ministry of Economy and Finance confirms it.
Celebrating the news, however, is Salvini, who announces the end of the “Big Brother” of taxes as a victory for the League.
It is being referred to as the “definitive overcoming of the Redditometer, an intrusive tool of a tax system seen as an enemy of citizens and workers that, from now on, will finally be part of the past,” but the Ministry of Economy and Finance remains cautious.

A few months ago, Deputy Minister Maurizio Leo tried to revive the Redditometer with some changes, but controversies forced the Government to backtrack, leading Leo to suspend the reform of the tool.
It was a suspension, not a goodbye.
Indeed, Giorgia Meloni, just 24 hours before the publication in the Official Gazette (May 20, 2024), announced the suspension of the measure, pending further investigation.

Now, the definitive answer arrives to the lingering questions after the U-turn, and Salvini’s announcement about the cancellation of the tool, although it is not a real cancellation.
The Redditometer has been entirely revised, leading to the latest Council of Ministers: the inductive income assessment remains, albeit with changes.

The Redditometer: not a farewell, but only a change

Therefore, the Redditometer remains, albeit modified.
We are not yet informed about the changes made and how the income assessment will work.
It may no longer be called Redditometer, but the essence remains the same, as its duty will still be to determine income in an inductive manner.

Certainly, its use will be less extensive and limited only to cases where tax evasion is detected (Leo himself suggested using it in cases of undeclared income).
However, the new Redditometer will have a slightly broader scope than initially thought.

In its opinion on the new measure, Parliament has requested that the inductive income tool be directed “exclusively towards situations with high levels of disparity between declared expenses and incomes, even considering percentage thresholds that reduce or eliminate the discretion of the Revenue Agency.” This does not differ much from what is currently provided by the Redditometer, as it only kicks in when the deviation between declared and presumed income is over 20%.

When would the “new” Redditometer come into play?

In what particular cases could the Redditometer or its replacement be activated? The inductive income assessment (because that’s what we’re always talking about) should only be implemented in cases where taxpayers already have profiles indicating a risk of tax evasion.

The President of the Finance Committee in the Senate, Massimo Garavaglia, emphasizes that abolishing the Redditometer, understood as a mass inductive income tool, would not only increase taxpayer protection but also focus anti-evasion efforts solely on individual cases of risk profiles, allowing for much more precise intervention.

Therefore, there would not be the much-feared generalist application that indiscriminately involves all taxpayers.
However, it remains to be seen how strictly the indications provided by Parliament will be followed and how they will be integrated into the regulations governing the “new” Redditometer.