The Coming of the Big Brother of Taxes: Easier Ways to Defend Yourself

The Return of Redditometro: Controversy and New Rules

After the approval of the decree reintroducing the Redditometro (with some modifications), many political forces have expressed their opposition.
The decree, signed last May 7th by the Deputy Minister of Economy Maurizio Leo, has reintroduced the old tool that was used by the Revenue Agency until 2018.

New rules have been added to allow the presumed income, inferred from expenses, of each taxpayer to be compared with the declared ones to uncover any evaded amounts if the two values were significantly different.

The publication in the Official Gazette, last Monday, of the decree that had been awaited for several years, however, has stirred up controversy.
The Redditometro had been suspended in 2018 by the first Conte government pending the publication of a ministerial decree indicating the criteria for comparing presumed and real income and for controlling expenses.

The decree published on Monday introduces new rules to make the Redditometro active again and more functional compared to the past (given the limited results it used to achieve).
However, most political forces were caught off guard by the decree; even the majority itself, after the fact, declared itself against the Redditometro, to the point that Giorgia Meloni stated that she had “always been against the Big Brother fiscal”.

What Expenses Will the Tax Office Scrutinize?

Many sector experts believe that the Redditometro could be a valid tool to catch tax evaders; however, it does clash with limits that risk violating taxpayers’ privacy.

The expense items that will be analyzed by the Redditometro are numerous and include:

• Food and beverages.
• Clothing and footwear.
• Mortgage.
• Rent.
• Imputed rent.
• Real estate leasing.
• Water and condominium fees.
• Ordinary maintenance.
• Real estate brokerage.
• Electricity, gas, and centralized heating.
• Appliances and furnishings.
• Household items, detergents, pots, laundry, repairs.
• Domestic helpers.
• Medicines and medical visits.
• Insurance.
• Transportation expenses.
• Telephony.
• Educational expenses.
• Entertainment, hobbies, subscriptions.
• Sports activities.
• Pets expenses.
• Beauty and wellness.
• Travel and accommodations.
• Financial investments.
• Art and antiques.
• Extraordinary maintenance of housing units.
• Donations.
• Savings.
• Taxes, duties, and contributions.

The commencement of checks is set for 2016, but it should be considered that the prescription has expired for the years 2016 and 2017, so the starting point will be 2018.

Despite the intimidating nature of the Redditometro, defending oneself will be easier thanks to the double contradictoriness with the taxpayer: initially, all useful information for the assessment act can be provided, and then, with the acceptance assessment procedure, one can proceed to defend themselves.
Only if the total resulting from the Redditometro exceeds the declared income by 20%, the taxpayer will have to justify the expenses incurred and provide evidence of the origin of the amounts spent.