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Wed Nov 14, 2012, 05:36 AM

Beating tax cheats key to Italy's recovery plan

ROME (AP) -- Good plumbers may be worth their weight in gold, but when one was spotted zipping around in a bright red Ferrari, Italian tax police were fast on his trail.

Stamping out entrenched tax evasion is crucial to Premier Mario Monti's quest to keep Italy from succumbing to the European debt crisis, and it is critical to fellow eurozone members in more dire straits, such as Greece and Spain - which are also notorious for making cheating the taxman a way of life.

Indeed, Greece's international rescue creditors have been pressing Greece for two years to reform its ailing tax system, citing poor collection as a key factor keeping the country mired in crisis. In Spain, where tax fraud is rampant, as much as (EURO)90 billion ($150 billion) is lost each year to tax fraud -- the equivalent of the country's national debt, according to Spain's main tax inspectors union.

To succeed in Italy, authorities will have to catch the legions of self-employed and small business owners who brazenly lie about their earnings, like the plumber in the eastern town of Pescara, who socked away undeclared income in 30 bank accounts, or a successful pastry shop owner in Calabria, who on his tax return claimed he was earning next to crumbs.

http://hosted.ap.org/dynamic/stories/E/EU_ITALY_BEATING_THE_CHEATS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-11-14-04-55-09

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