Poverty pleaders found out

August 8, 1997

The Italian university ministry is to clamp down on students who claim fee rebates on grounds of family poverty, but in fact are not poor at all.

The national daily La Repubblica drew a picture of a hypothetical student who drives to lectures in a BMW convertible while chatting on his mobile phone, but enjoys a fee rebate because his father declares a very low income.

Journalistic hyperbole, no doubt, but not so far from the truth in a country in which tax evasion is widespread and the rich are often more skilful than the poor at exploiting the the tax system.

Fee rebates, partial or total, have been based on the declared income of parents and the number of children they have. But many self-employed professionals, particularly doctors, dentists, lawyers, and entrepreneurs, declare only a fraction of their earnings.

One common trick is to register cars, yachts and houses as property of the company, while declaring a pittance as the personal income of the head of the company.

The university ministry has ruled that from next year, students wanting a rebate will have to make a formal and detailed declaration of their family's earnings, possessions, real estate and investments.

The declaration will have to be made before a certified accountant who will responsible for its veracity.

The declaration will include details of every member of the family, including brothers and sisters, whose earnings and investments will be included in the overall "wealth/poverty index" of the family. It will also include houses owned, earnings, bank account balances and all investments. Each detail will have to be supported by documents and statements.

One Roman accountant, however, complained that "the government is trying to use accountants, who are not public officials, as controllers of what the state is incapable of controlling".

University minister Luigi Berlinguer assured Italians: "We have introduced criteria which will sweep away abuses. The new system will work."

Even if it does not work perfectly, it will certainly discourage many of the all too easy swindles of the rebates system.

The rebate means test data will be available to the tax authorities, which should also daunt "pseudo poor" families from exposing themselves by asking for rebates for their offspring.

The new means tests are part of an overall reform of the fee system. From next year there will be a basic fee of 286,000 lire (about Pounds 100) a year for rich and poor alike. The rich will pay, in stages, up to a maximum of about Pounds 500.

Poor students considered particularly worthy will pay nothing at all and will also be eligible for assistance in living costs.

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