Italy energy firms banned from passing on new tax

ROME, June 25 (Reuters) - The Italian government has banned energy firms from passing on a new tax to their customers, the text of the law showed on Wednesday.

Economy Minister Giulio Tremonti has dubbed his hiking of the main tax on company profits (IRES) to 33 percent from 27.5 percent as a "Robin Hood" tax as the extra revenues will be taken from wealthy companies and spent on the needy.

Energy companies initially protested but have since played down the impact of the tax. Fulvio Conti, chief executive of power utility Enel (ENEI.MI: Quote, Profile, Research) said the tax would be "easily absorbed" by his group.

Media had speculated that the tax on oil, gas and electricity companies, would mean an extra burden to consumers already facing higher costs due to rising oil prices.

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'File your tax returns in time or face action'

NEW DELHI: Brace up for a call from the Income Tax (I-T) department if you are not filing your returns every year. This time, taxmen have an express instruction from the government to drag you to courts, if the need so arises, to ensure compliance.

With Finance Minister P Chidambaram hopeful of collecting an ambitious Rs 4 lakh crore in direct taxes in the current financial year, the authorities have been instructed to take up as many surveys as possible besides conducting raids on suspect big evaders to meet the target. Soon after inaugurating the two-day conference of chief commissioners and directors-general of Income Tax on June 9, Chidambaram had said that the department had already taken up 15 cases of 'non-filer' (those who have never filed a return) and 'stop-filer' (those who have stopped filing returns) for prosecution.

Hinting at stern action against wilful evaders, the FM had announced that a general direction had been given to taxmen that if during a survey or a search a person is found that he had never filed a return (non-filer) or has stopped filing return (stop-filer) in the last three years, steps must be taken for his prosecution. According to existing provisions of the I-T Act, failure to file returns may land a person in prison for a term extending up to seven years in case he is found to have evaded tax of more than Rs 1 lakh, or a penalty of Rs 5,000 for those on whom tax dues are found but returns are not filed.

Though the law on filing mandatory returns has been in existence for a long time, the very reiteration of the fact indicates the government's intention to invoke its provisions to catch wilful evaders.

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No tax deduction at source on service tax?

You have been advising that payment to a service provider, which is inclusive of service tax, would require tax deduction at source on the entire amount, inclusive of service tax. In view of the Board’s Circular No. 4 of 2008 dated April 28, 2008, your answer would require revision. The Circular may be publicised for the benefit of readers.

The Central Board of Direct Taxes in Circular No. 4 of 2008 dated April 28, 2008, has responded to a request for clarification as to whether service tax should be included in rent for tax deduction at source under Sec. 194-I in the following words:

“3. Service tax paid by the tenant does not partake of the nature of “income” of the landlord. The landlord only acts as a collecting agency for the Government for collection of service tax.

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Italy energy firms banned from passing on new tax

ROME, June 25 (Reuters) - The Italian government has banned energy firms from passing on a new tax to their customers, the text of the law showed on Wednesday.

Economy Minister Giulio Tremonti has dubbed his hiking of the main tax on company profits (IRES) to 33 percent from 27.5 percent as a "Robin Hood" tax as the extra revenues will be taken from wealthy companies and spent on the needy.

Energy companies initially protested but have since played down the impact of the tax. Fulvio Conti, chief executive of power utility Enel (ENEI.MI: Quote, Profile, Research) said the tax would be "easily absorbed" by his group.

Media had speculated that the tax on oil, gas and electricity companies, would mean an extra burden to consumers already facing higher costs due to rising oil prices.

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Accountability or accounting?

When Nicolas Sarkozy’s government spokesperson announced that each minister’s performance would be assessed according to criteria set by a private auditing firm, he probably did not expect to elicit a fierce response. But he should have

When Nicolas Sarkozy’s government spokesperson announced that each minister’s performance would be assessed according to criteria set by a private auditing firm, he probably did not expect to elicit a fierce response. But he should have. The opposition quickly attacked the move as a “dangerous gimmick” and a “smokescreen.” One pundit asked, “Will the time soon come when ministers are hired by head-hunters?” And a young MP declared that “France cannot be managed like a bolt factory.”

But what is so absurd about establishing standards by which to assess the fulfilment of Sarkozy’s campaign promises? As soon as they were appointed in June 2007, Sarkozy’s ministers were given a clear set of objectives in the form of a letter of intent. Isn’t it normal to create some means of holding ministers accountable?

A culture of “results” has become central to economic modernisation in France, so shouldn’t the same be true of French governments, with their entrenched inclination toward passivity and aloofness? And the issue of setting measurable standards for government operations is not confined to France. British Prime Minister Gordon Brown has made such quantifiable goals a hallmark of his leadership ever since he was Chancellor of the Exchequer.

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