ROME, ITALY – Money is tight in Italy and the government is hoping that pornography may be the solution to its cash flow problems.Apparently pornography is one of the few domestic industries actually making a profit in Italy, so the powers that be have decided to slap it with a “porno-tax” in the hope that enough money will be generated to improve the country’s economic health and ease some of the strain caused by an ever-increasing budget deficit. The tax is no small matter, either. Pornographers will bear and additional 25-percent tax burden on all income from their trade.
The tax, included in a package of amendments to the 2006 Italian budget, was presented to the Chamber of Deputies this week and taps a wide assortment of pocket books, including consumers. For instance, subscribers to adult television channels will be expected to shell out another 10-percent when they pay their subscription fees.
If successful, the new tax is expected to bring in approximately 300 million euros during 2006.
The Eurispes institute recently calculated that revenues from pornography and related industries was 1.1 billion euros during 2004, which was a 100 million euro increase from the previous year and a 27-percent increase from 1991. In other words, porn earned about one-third as much as Mediaset, one of Europe’s largest broadcasters – or the same as Giorgio Armani makes in a year. Randy Italians spent as much as 247 million euros on subscription television in 2004, which was 63 million euros more than the year prior.
Unlikely to affect the adult industry is a tax amnesty agreement that would theoretically allow some tax payers to pay a small portion of their owed taxes in order to resolve disputes. Although supposedly available to companies and self-employed individuals, and restricted to taxes owed for the 2003 – 2004 fiscal year, the economy minister has insisted that no one will be allowed to take advantage of the program. Instead, efforts will be stepped up to reduce tax evasion by allowing companies and the self-employed to make limited tax payments in advance for the next three years instead of making regular tax return payments each year.
The proposed budget was introduced in September and hopes to cut the 2006 deficit by 16.5 billion euros, which would make it 3.8-percent of GDP, as opposed to 4.3-percent in 2005. Parliament must approve the package by year end in order for it to take effect.
