The Guardia di Finanza
By Vincent Thorn
Morning in Cagli. As the sun begins its journey across the Italian sky, shop owner after shop owner opens business for the day. A stroll across the piazza brings the tantalizing smell of espresso. The rich smell of coffee beans bathed in hot water has an overpowering hold, and there is no choice but to stop in for a quick espresso at Cafe d'Italia. A clear “ciao” brings the owner Enzo to the bar. "Un espresso, per favore" sends him off in a hustle as he prepares it.
After a few weeks, Enzo seems an old friend who makes small talk while this heavenly brew is born. Business has been doing well and he's happy because for the most part the government hasn't given him too much trouble. At least until today. He puts the expresso on the saucer with a familiar ring, and it was worth the wait.
As you polish off the sumptuous concoction, Enzo says there's no charge, it’s on him. Just as you turn to leave, a gentleman approaches Enzo and informs him that he is being fined 300 euro for not issuing you a receipt for your purchase.
Surely this is some practical joke. 300 euro for not issuing a receipt; is this man crazy? However, this a real dilemma for Cagli shopkeepers. The Guardia di Finanza, or the Financial Guard, is adamant about enforcing the sales tax law, and these fines were created to keep shop owners honest when paying their taxes.
The receipt law was enacted about 10 years ago because, as a Roman woman commented, the national sport of Italy is tax evasion. Like every government, the Italian one wants to ensure everyone pays their share. An American professor, who lived in Rome for three years and has taught there periodically over the past 25 years, recalled an owner of a pasta shop in his neighborhood who would simply leave his cash register open and ring up every fourth or fifth customer. It seemed a common practice in small shops, he recalls.
The sales tax law requires a shop owner to ring up each purchase and give the customer a receipt in order to be sure each shop owner pays the proper amount of sales tax to the state. Italy uses the Guardia di Finanza to enforce its sales tax system, and they, in turn, hire undercover agents like the one who fined Enzo.
Aside from checking the receipts of the shop owners, the guardia is responsible for investigating the black market and organized crime businesses, especially in Naples, Sicily, and Calabria. To this day, if a person deposits more than 10,000 euro into an account, the guardia audits them immediately.
The guardia was developed in 1959 as a division of the Italian armed forces. Its overall purpose is to enforce all economic matters as determined by the minister of economy and finance. Its main focus is financial evasion and violations.
Family connections may allow some to skirt a guardia sting. One shop owner claims he need not worry about the guardia because his brother is a police officer. This connection to law enforcement not only keeps him out of general trouble, he claims, but it also allows him to avoid any investigation. He believes he doesn't have to hand out receipts or worry about the state of his account books. To his credit, he still hands out sales receipts for meal purchases.
Among shop owners interviewed, the general attitude seems to be that the guardia focuses too much enforcement effort on minor business practices such as receipts, rather than prosecute big time tax evaders. The owner of the Gelateria Artiginale, recalls that in her first month of business she was investigated three times solely because she was a new business.
The guardia’s preferred technique is to send undercover agents into the small shops hoping to catch them slipping up. Enzo recalls that in his 28 years of business, he was caught twice for not handing out receipts. One of those times he gave his friend an espresso.
The owner of another coffee bar refused to talk about the subject because of an earlier interaction with the guardia. Passionate about it nonetheless, the owner had nothing flattering to say about the guardia’s methods.
Many small business owners had at least one unhappy story, and the emotions are mixed but in the end the guardia are doing their job.
Even customers have been asked for receipts following a purchase. A customer can help a bar owner avoid 300 euro headaches by keeping the receipt until exiting the bar.
For more information visit: http://www.gdf.it/Home/
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