IMF Calls for Abolition of Italy’s Flat-Rate Tax Regime Amid Rising Self-Employment Rates

• The IMF suggests abolishing the flat-rate tax regime to address fiscal distortions and expand the tax base.
• The Italian Ministry of Economy and Finance reports a record increase in flat-rate tax regime enrollments.
• The debate raises questions about fairness, tax evasion, and the future of Italian taxation.
• The flat-rate regime allows self-employed individuals to pay a reduced substitute tax based on a profitability coefficient.
• This regime may create disparities between self-employed individuals and employees with similar incomes.
• An example shows significant tax savings for those in the flat-rate regime compared to employees.
• The IMF identifies potential issues like tax base expansion, transparency, and simplification of the tax system.
• The flat-rate regime may encourage tax evasion practices, such as artificial activity division or creating fake self-employment to save on taxes.

Source: commercialistatelematico.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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