Pay up or weigh anchor? Italy's yacht owners feel the tax collector's heat
The Italian government is targeting yacht owners in a crackdown on tax evasion. Is that why marinas are emptying out?
Amid one of Europe's worst economic crises since World War II, cracking down on endemic levels of tax evasion is vital for countries such as Greece, Italy, and Spain as they attempt to get their finances back on track.
In their hunt for tax dodgers, Italian tax officials have launched a campaign of on-the-spot checks of expensive yachts, amid suspicions that many of their owners dramatically under-declare their earnings.
But the crackdown has had an unexpected effect. Boat owners are simply weighing anchor, battening down the hatches, and sailing out of Italian waters to neighboring Mediterranean countries where they are free of scrutiny. Business is down by more than one-third in many of Italy’s marinas, and the exodus of the boats has cost the economy 200 million euros in lost revenue from mooring fees, port services, and fuel sales, according to Assomarinas, the Italian Association of Marinas.
That is boosting the costs already incurred by a widespread culture of tax evasion. Tax dodgers – as well as the black market – cost the state 275 billion euros annually, or 17.5 percent of GDP.
Still, said Attilio Befera, the head of Italy's tax collection agency, conducting raids on yacht marinas was effective in striking a degree of “healthy fear” into people who were trying to avoid their tax-paying duties.