commission on fiscal imbalance 合集

Table 3 tax receipt and contributions percentage

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Unformatted text preview: the proposal is still under discussion within the governmental coalition and it is early to foresee any definite result. 3. REGIONAL AND LOCAL DECENTRALISATION: THE REVENUE SIDE The main steps in regional decentralisation took place in 1992 with the attribution to the Regions of health service contributions and automobile taxes; in 1995 state transfers were abolished excluding those for the health fund, for natural disasters and for purposes of major national interest, and they were offset by the assignment to the Regions of a share of the excise tax on petrol and the institution of an equalisation fund. Another step towards fiscal autonomy was made by the Regions in 1997 with the attribution to the regional level of a new tax on productive activity, known as IRAP, and of a personal income tax surcharge. The major change however took place in 1999 with Law 133, which abolished health fund transfers and assigned to the Regions new shares and surcharges of central government taxes, in particular VAT and income taxes. This was accompanied by the redefinition of rules regulating the financing and utilisation of the equalisation fund. These rules are based on revenue raising capacity and on needs that, in a first transition phase, are mainly health service needs. The way in which the share of VAT is distributed among regions is influenced by the capacity of regional government to 252 Commission on Fiscal Imbalance satisfy health service needs with the share of VAT produced by their regional territory. Such needs are quantified on the basis of parameters regulated at the central level by the National Health Plan agreed by all level of government. The equalisation mechanism is ensured by horizontal transfers from regions which produce higher VAT receipts to Regions that produce lower VAT receipts for the amount necessary to cover the estimated needs. Even if the model under construction seems to be characterised by vertical co-operation, the VAT reform introduced a different pattern, which recognises the amount of resources produced by each geographical area and makes clear which region is transferring funds and which region is benefiting and by how much. There is at the moment an intense debate among researchers, and unfortunately less among public opinion, about the definition of the parameters for defining needs and for identifying the concept of minimum service, stated by the Constitution. Richer regions may push in the long run to reduce the content of minimum service in order to free resources to finance their own priorities. The autonomy of local governments was also enhanced in 1992 with the institution of the municipal real estate tax and in 1993 with the reorganization of minor taxes. In 1997 some previously existing municipal taxes where abolished and offset by a share in IRAP and the institution of a municipal surcharge on personal income in 1998. In 2002, with the implementation of the municipal surcharge on personal income tax, the share of regional and local receipts, estimated at around 19 per cent of total national revenues, will be sig...
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