Bank of Italy raises doubts about the effectiveness of the new debt relief program.

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Today, the Bank of Italy was heard by the Senate on the budget. Among the various points raised, a critical and cautious approach emerged regarding the new debt restructuring plan promoted by Deputy Prime Minister Salvini (Lega).

From the very first lines, Palazzo Koch makes it clear that the new tax write-off is costly: immediately, and significantly. During his speech, Fabrizio Balassone, Deputy Director of the Department of Economics and Statistics, then highlighted that the simplified settlement of outstanding debts entrusted to the collection agency, the so-called "scrapping" of tax bills, is estimated to result in "a revenue loss of €1.5 billion in 2026 and an average of €0.5 billion over the following two years," and to subsequently generate additional revenue of €0.2 billion per year on average from 2029 to 2036. The Institute warns, however, that while the scrapping could generate €9 billion by 2036, ordinary tax collection would decrease even further, by approximately €9.8 billion.

Second, the Bank of Italy expresses practical uncertainty about its success, based on past experience and the Revenue Agency's findings regarding low enrollment and actual collections. Skepticism centers both on the size of the benefit and on the mechanism's credibility in terms of sustained recovery. In March, according to the Revenue Agency, only about half of the amount due through the various debt relief programs (five since 2016) was paid. According to the Bank of Italy, similar issues could arise with the new facilitated settlement. And that's not all. The institution notes that the settlement program (the debt relief program) remains effective even if an intermediate installment is partially or completely missed. Thus, even if the debtor doesn't pay the full amount, he or she can continue to benefit from the tax shield because the debt collection agency cannot initiate forced collection.

Finally, Balassone notes, "tax evasion damages growth and produces inequity, putting honest businesses and citizens at a disadvantage" and then continues: "The maneuver opens the way to a new "scrapping": an instrument that in the past has not increased the effectiveness in recovering revenue ".

It's easy to deduce, therefore, that the measure is more political than structural in nature. Between the lines, it seems clear that for Bankitalia, the real path lies in more efficient ordinary tax collection and anti-evasion tools based on data and technology.

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