Tax reform, here are the expectations of SMEs
The speech by Paolo Longobardi, honorary president of Unimpresa
The final document, on the subject of the general tax reform, prepared by the VI Finance Commission of the Chamber and by the VI Finance and Treasury Commission of the Senate, allows a first assessment by a company on the Copernican revolution, now undelayable and necessary, of our tax system, and on the expectations on the part of SMEs, which, on a fair and just taxation, are counting on the resumption of their activities, massacred by the restrictive measures launched to contain the pandemic.
In order to restart real economic growth, our companies, especially micro, small and medium-sized enterprises, have an urgent need, first of all, to see a process of simplification and streamlining of too many regulatory technicalities and a thinning out of excessive steps implemented, administrative and bureaucratic. Only in this way, as the same document points out, will it be possible to guarantee certainty in the application of the rules and consistency of the tax system, as well as ensure that the tax system is and is also perceived as fair, reliable and transparent. We all know that a cumbersome tax system, like ours, represents an undoubted advantage for those who try to find, among the folds of complexity, the tricks to escape and hide in the "jungle".
1. THE CODIFICATION OF THE TAX REGULATION
"The efficiency and competitiveness of the production system, economic growth and the quality of life itself are affected by the quality of regulation, as well as by administrative simplification."
The current Consolidated Texts are decades old and are stratified, which is why enclosing the many tax rules in a single code, as the Commissions suggest, will be important for companies, taxpayers and many professionals, who operate in the tax field. , accounting and tax. The disordered proliferation of laws, fragmented and disorganized, the lack of clarity of the legislative dictation and the excessive complexity have ended, over the years, by transforming tax legislation and law in general, from a factor of certainty and trust into an element of uncertainty and insecurity for all honest taxpayers, citizens and companies. The codification, of which the final document of the Commissions reads, therefore appears indispensable as long as it is possible to remedy one of the most serious problems, which Italian companies and their consultants have to face. That is, the lack of clear coordination between the various rules, which often overlap with each other. To the point of ascertaining, on the part of those who actually work in the field, that even the authorities responsible for supervising and controlling companies, are often displaced by the presence of evidently contradictory rules. Another important aspect, not to be underestimated, in a process of real tax simplification, is linked to the implementation times of the regulations. There are concrete situations, in which compliance with the standard is easy, in other circumstances it is not at all: companies, therefore, risk being in default and, therefore, punishable, in the event that it is materially impossible to adapt to a new forecast, within the time prescribed by the law. The Tax Code, which the Commissions deem necessary to include the existing consolidated texts and other tax laws, must be accompanied by a simultaneous drastic reduction in the number of rules and greater attention to the quality of the regulation, through a logical harmonization of the rules. .
2. DEFORESTATION OF MICRO TAXES
The deforestation of microtaxes, while guaranteeing revenue invariance, would clearly help the simplification process for all taxpayers (companies and individuals), according to Unimpresa.
3. THE CLOSING BETWEEN TAX AND CIVIL BUDGET
It is known that the fiscal balance sheet, in compliance with the principle of contributory capacity, refers to the calculation of taxable income, while the civil balance sheet, in compliance with the principle of truth and fairness, refers to the determination of economic income, which correctly sets out truthful and clear, the entire economic, financial and patrimonial framework of the companies. From these different purposes, the need arises to identify and eliminate both fiscal interference, relating to past years (previous interference), and fiscal interference for the period, ie those of the current year. In the document, the Commissions, although they consider the complete identification of the two criteria unrealistic and undesirable, look to a rapprochement between the two criteria (already started with the IAS), in order to reduce complexity and favor the stability of the rules. By partially reducing this unhealthy coexistence in the budget, between civil law and purely fiscal rules, a fair perspective of separation of operational areas could be re-established to the benefit of companies, especially those of smaller dimensions, less structured from an administrative point of view, but also of the same tax authorities. In fact, even for the auditors themselves, it becomes complex to establish, if and in what terms, they are allowed to extend the inspection activity “upstream” of the increases or decreases, consequent to the application of the specific tax rules and provisions.
4. THE CHOICE OF THE INCOME TAX MODEL
Already in the 1960s, the illustrious Professor Cesare Cosciani wrote that the coupon system eliminates that unified vision and that homogeneity of treatment, which should be the basis of any equalized tax system. In fact, over time, there have been many exceptions to the principles of generality and progressivity of taxation, motivated by reasons of taxation technique, of contrasting tax evasion, of will to facilitate or anticipate revenue, or, again, for the achievement of savings exemption targets, and so on. The enabling law for the tax reform of 1971, that is to say fifty years ago, provided for limitations to cases of non-progressivity of the tax. The profound social and economic upheavals of the last half century have increased, from year to year and for various reasons, the exceptions to the determination of taxes in a progressive manner, shifting many types of income to the area of dry taxation. This appeared necessary in the light of the complexity of the Italian tax system which, and this is the case with minimum and flat rates, often charges management and administrative costs that would not justify the undertaking. It is quite clear that, for social equity, the categories admitted to the benefit should be better identified, as well as the requirements and the tax to which the income is subjected. Just as it is quite clear that financial income should be subjected at least to the first corresponding rate of taxation of IRPEF. Surely individual taxation is neutral in the offer of the second income earner. In relation to the "modification of the institutions that discourage the offer of work, with reference to the extensive margin of the second income earner", one could consider the hypothesis of an increase in income values, within which they can be recognized by the other earner. Also the proposal to introduce a temporary facilitated taxation, in case of entry to work of the second income earner, the amount of which is congruently higher than the deduction for dependent family member, could facilitate companies in the search for workforce due to a greater availability of the second earner to work.
5. THE ADDRESSES OF THE IRPEF TAX RE-DESIGN
The insecurity on income (for individuals) and on turnover (for SMEs), caused by the pandemic, does not stimulate household spending, nor does it encourage the purchase of plant, equipment and machinery, which could be used by companies to increase and / or improve their production. The consequent danger of a downward spiral in GDP arises from this simple consideration. With the system of revision and amalgamation of the personal income tax rates, proposed by the Commissions, it seems likely that the losses of revenue for the State would not transfer the effects on the taxpayers, otherwise considerable. The reorganization of the rates would not only lead to a simplification of the IRPEF taxation and a standardization of some differences, present in the current five-rate distribution, but would help companies in the restart and growth: a circumstance, in the panorama of the recovery of small Italian businesses , which would be supportive, resulting in a lower tax burden. A transformation of this type could lead to a recalculation of the entire economic system, positively affecting the recovery of GDP. In the context of greater fairness of the tax claim, the absorption of the interventions of 2014 and 2020, concerning employee work, appears unavoidable, not separated, as already underlined, by a better dynamics of the IRPEF rates, capable of softening the curves. A drastic reduction in the overabundant deductions and deductions currently in place, which often appear mocking for low-end incomes, remains desirable and appropriate. It could be interesting to leave only the deductions and deductions, which concern the expenses related to the protection of the person such as health and education. With regard to tax expenses relating to the consumption of particular goods and services, where it is appropriate to support the economy by encouraging private spending, it may be appropriate to affect the costs of indirect taxes, by granting preferential rates and / or credits in favor of the service provider. or suppliers of goods.
6. LOCAL ADDITIONALS
With reference to local surcharges, it should be noted that the current legislation creates an evident contribution discrimination, linked to the place of residence: in practice, although all are citizens of a single state, each contributes in a different way. It would perhaps be appropriate to allocate a percentage of the revenue to local autonomies, based on the place of collection. On the other hand, local autonomy could also be achieved through the instrument of tariffs, which, being linked to services, would be immediately controlled by the citizen.
7. THE METHODS OF PAYMENT OF DIRECT TAXES FOR SELF-EMPLOYMENT
The Commissions agree on the need to establish an optional installment mechanism, intended for individuals, partnerships or corporations, or associations. Remaining an optional type of regime, the eventuality would leave a just discretion and freedom to taxpayers. In absolute terms, it should be noted that the current system of tax payment appears to be of greater equity among taxpayers, as it better aligns the payment of taxes in the relevant year, between employees and other taxpayers. If you want to facilitate self-employed workers in the payment of taxes, which, among other things, would significantly increase the tax deadlines due to monthly payments, a minimum of interest should be provided on the installments to compensate for the greater work of the tax offices in the control and in the processing of payments, and the greater time granted to the self-employed compared to other taxpayers. The abolition and reduction of withholding taxes could create a delay in the tax revenues of the State, which would certainly affect the cash flows of the Accounting Office, even if Istat deems it not influencing the net debt.
8. BUSINESS INCOME TAX (IRI)
The reintroduction of article 1, paragraph 1063, of the 2018 budget law, appears appropriate not only for the purpose of greater fiscal equity, but, mainly, for the incentive for the growth of SMEs, which would find it convenient to recapitalize, for investment purposes, the activity.
9. THE TAXATION OF FINANCIAL INCOME
The Commissions are aware and have clearly highlighted how decisions relating to the taxation of income of a financial nature are crucial for long-term economic growth, as they affect the risk-return combination of a financial investment and the choices for allocating savings, therefore of capital formation. However, it must be stressed that SMEs need stability above all else. In this sense, treating, for example, a possible bond loan from an SME as a share of a large company or a multinational would mean exposing our Italian productive fabric, made up of small and medium-sized enterprises, to the consequences of trading risk. , therefore to the fluctuations and instability of the markets. In fact, assimilating income from capital to different income would expose Italian small and medium-sized enterprises to many risks, since, ontologically, there is an important difference between capital income, which derives from certain events such as coupon flows or dividends. that derive from equity investments in companies, and other income, which are those produced by uncertain events, linked to the appreciation of the value of the stock, i.e. the gain deriving from the difference between the sale price and the purchase price, in practice the gain generated by trading . Hence the need to understand whether the reform is intended to free up resources with the aim of providing liquidity to SMEs, as companies, or whether it is intended to allocate resources to the world of speculative finance and trading. The possibility of issuing "SME Mini Bonds" could be interesting for Italian companies. It is hardly necessary to recall that the Minibonds were introduced by the Development Decree in 2012 (Monti government), as a financing tool for unlisted companies that wished to open up to the capital market, to reduce their dependence on bank credit. . The circumstance would become interesting, if these "SME Mini Bonds" were previously assessed and, consequently, guaranteed by some government agency. The eventuality would make them a safe and reliable instrument, attractive and better tradable among qualified operators on regulated markets. The hypothesis would give our SMEs the real possibility of finding financial resources through alternative channels to bank credit.
Everything should go through three stages:
a) careful and scrupulous risk assessment by a government body;
b) partial guarantee of a government agency;
c) similar tax treatment.
With reference to the proportional replacement rate, currently set at 26%, which would be intended to be in line with the first progressive rate on income from work and uniformly applied, it is believed, for the reasons set out above, to have to evaluate (except for BOT, CCT, etc.) , the hypothesis of an income ceiling on the application of the rate at 26%. Once this income threshold is exceeded, the rate would become an advance payment with a difference to be treated according to ordinary rates, in compliance with the principles of proportionality of contributions.
10. EXCEEDING THE REGIONAL PRODUCTION ACTIVITIES TAX (IRAP)
A company agrees on the need for a reform, leading to the overcoming of the Regional Tax on Productive Activities. In fact, it should be noted that IRAP means a mere duplication of income tax, with the only difference in calculating the taxable amount. Taking the cue from the reabsorption recommendation, received by the Commissions, it would be conceivable to abolish IRAP, with a merger with IRPEF or IRES taxes, a circumstance that would bring about a desirable simplification of bureaucratic requirements for businesses and professionals, without causing particular changes in tax revenue. The lack of regional income would be compensated by the devolution to the regions of the higher rate due to the same.
11. THE SIMPLIFICATION OF THE INCOME TAX OF COMPANIES (IRES)
The Commissions have already expressed the need to start an overall simplification of the Corporate Income Tax (IRES), in order to bring the criteria for preparing the financial statements for tax purposes closer to those of the financial statements for civil law purposes. The approximation of the tax profit to the statutory profit appears to be at least desirable, given the frequent strong misalignment between the two values, through a revision of the criteria for preparing the financial statements in one with a revision of the increases and decreases in the statutory income, for the purposes of determining the taxable amount. The frequent facilitating interventions, put in place by the government to support the economy, internal demand or the increase in GDP, through rules that are not always easy to apply, could actually find a solution in a restyling of the IRES levy. For example, by providing for the provision of profits in a reserve, suspended from tax, to be allocated to interventions in the field of ecological transition, or to improve company productivity, or for the acquisition of shareholdings in micro and small enterprises. The latter, in fact, protected by a company, cause difficulties in accessing the financial markets, fail to develop their business, especially in the penetration of foreign markets and, absolutely, for all those investments that, from time to time, the government deemed worthy of attention for the socio-economic growth of the country. With regard to deductibility, the provision of extending the deductibility to the previous year appears somewhat problematic, affecting public finances in an unpredictable and unmanageable way, in the event of a strong recession, while full deductibility in the tax period appears desirable. immediately following.
12. MEASURES IN FAVOR OF THE ENVIRONMENT
In terms of the environment, the interventions proposed by the Commissions are certainly adequate. The tax reform could intervene in an incisive way in favor of the environment, also with the criterion of penalties and benefits on ecologically impacting behaviors. For example, through a VAT differentiation policy, which rewards certified productions as environmentally friendly and having a real impact on the final consumer. Or with tax credits to companies that develop investment plans to respect the environment and improve living conditions, including the work style of their collaborators. Tax concessions and reliefs could also be envisaged for the relocation of those factories, located in residential areas or historic centers, therefore in areas not compatible with production activities.
13. VALUE ADDED TAX (VAT)
VAT is a tax, designed to affect the final consumer, who is not always a natural person. The consumer perceives the total paid (cost + business profit + VAT), as a single outlay, therefore in making his purchase choice, he will never be conditioned by the first element represented by the cost. A reduction in VAT, therefore, does not affect, in absolute terms, the choice of the consumer, who uses, and not always, the tax savings to buy other products. It thus feeds the market in a generalized way, often orienting itself, albeit unconsciously, on the products of those companies that offer goods and services at lower prices, not so much for their real capacity for productive rationalization, but, sometimes, because they lower their production costs ( and therefore the selling price), through unorthodox uses of the human factor and the tax / contribution burden, to the detriment of healthy and honest companies. A targeted increase in VAT rates with a reduction in the cost of labor of companies, if well conceived, could lead, given the invariance of the final cost, to disadvantage companies that are not very virtuous, which do not always fall under Italian legislation, and, in any case, to a greater revenue for the tax authorities.
14. THE FIGHT AGAINST TAX EVASION AND THE TAX-TAXER RELATIONSHIP
The tax reform, we always read in the final document of the Commissions, will have to take the opportunity to graft, in a decisive and irreversible way, a paradigm shift in the relationship between the tax administration and the taxpayer. In this sense, the Commissions recommend mechanisms that include the granting, in favor of deserving taxpayers, of forms of certification of compliance with tax obligations, on the basis of which automatically recognizing benefits such as, by way of example, the reduction of the control terms. and assessment, as well as the tax refund times. This circumstance is an advantage for the many small and medium-sized enterprises, like ours, which are honest and virtuous. However, it is desirable that tax audits on the ground become increasingly targeted and restricted to cases in which they are objectively indispensable. And, in absolute terms, they must be minimally invasive, in order to avoid the recovering companies from seeing their activities blocked or their functions limited, for days and days, often weeks and, sometimes, for the months of duration of the checks. on site. Here, too, the objective could be achieved with the increasing use of digital technologies, which would be a less expensive tool for the public administration and more and more effective in combating tax evasion. Likewise, the reduction of tax, administrative and bureaucratic obligations for professionals, companies and intermediaries, as an unavoidable and structural constraint, would become an essential element, as it would allow these three areas to be able to allocate their skills, their resources and much more time to activities consultancy and entrepreneurial services, which are suitable for them, thus favoring and accelerating the economic recovery.
However, privacy, which is very important, has become yet another fulfillment, which Italian companies must comply with: the circumstance becomes unsustainable when, working in practice, the principles of protection of privacy prevent the full realization of the advantages deriving from the increasing digitization. The fight against tax evasion appears to be well addressed with the limitation of the use of cash, the introduction of electronic invoices, reverse charge and split payment. The aforementioned measures, even if opposed by many, are, in fact, a good antidote to evasion. Only as regards the reverse charge, the mechanism, in some cases, can create corporate liquidity problems, which could be easily solved, by authorizing the offsetting on a quarterly basis, without further bureaucratic burdens of the credit claimed from the tax authorities, avoiding wait for the annual VAT return.
With regard to tax debts, which are periodically scrapped or forgiven, one should, when fully operational, distinguish into two different categories of debtors: the real tax evader and the debtor unable to pay. For the first, it would be necessary to act with tax collection roles and careful monitoring, in order to hit all its assets, until the tax claims are completely exhausted. For the second, on the other hand, it should be admitted to a debt repayment regime, subject only to the cost of the agreed legal interest, on the basis of a certified possibility of repayment, also foreseen for a medium-long period, based on the assumption of saving the business or the unfortunate taxpayer.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/riforma-fiscale-ecco-le-attese-delle-pmi/ on Sat, 03 Jul 2021 06:46:32 +0000.