Revenue Returns – Saving Banks

«The Economist», 20 agosto 1921, p. 298

Turin, August 13

Recent revenue statistics give interesting particulars of the financial results of past year. The general real revenue was 12,600 millions lire. About 1,700 millions are classified under the head of minor or miscellaneous items. The other items are classified as follows (in millions of lire):

In the income-tax category, the most interesting feature is the great increase in the yield of the excess profits tax, which goes from 1,029 to 1,991.5 millions lire. For two years this tax will still give a large yield, but its ultimate disappearance must be looked forward to with some concern. Fortunately, other taxes show signs of taking its place. First of all there is the extraordinary tax on capital, which from nothing in 1919-20, rose to 452.5 millions lire in 1920-21, and may yield during the first ten years of its existence about 1,000 millions annually. This will enable the Treasury to surmount the most difficult period in the reorganisation of the old income-taxes. The oldest of all, the tax on land income, progressed only from 114 to 115.6 millions lire in the last two years. The yield is stationary owing to the antiquated methods of valuing land incomes. Once reformed, the tax will give more important results. The tax on professional, industrial, commercial incomes and on incomes of capital and public and private employments rose from 686.4 to 935.3. This is a satisfactory rate, and full of promise. Next year the provisional super-tax on incomes above 10,000 lire will be superseded by a new complementary tax on total income, which is bound to yield a much greater sum than the paltry one of 89.4 millions lire furnished by provisional tax.

In the stamp and concession category, perhaps the most interesting items are the luxury taxes:

This category, which is in its initial stage, is very promising, especially if the Exchequer will resist proposals to increase excessively the rates of tax.

The increase of 293.3 millions in excise is wholly due to the new tax on wine, which from nothing in 1919-20 passed to 311,1 millions lire in 1920-21. But the wine growers are very influential in Italy, especially among the popular or catholic party. This party has secured a partial repeal of the voted increase of the rate of the tax from 10 to 30 lire per hectolitre. The tax will be increased only to 20 lire. Even so, the wine tax will give next year an increased return.

The commercial monopolies on coffee, coffee substitutes, & c, have been repealed, as I said in a recent letter, but the Exchequer will lose nothing, as coffee and coffee substitutes will remain subject to an equivalent excise tax.

The industrial monopolies continue their brilliant career:

Tobacco and matches are closely connected, and the regularity of their consumption, in spite of heavy increases of prices, is a most interesting feature of post-war finance. It appears that common people, who before the war consumed very little of this luxury, have learned the taste for tobacco in the trenches, and are not apt to lose it.

A report on the ordinary saving banks (exclusive of postal savings bank) gives the following figures of deposits (in millions of lire):

The increase is following the march of the depreciation of the lire; but, nevertheless, is a proof that workers, public and private employees, farmers, and the middle-class of professional and commercial people, which constitutes the bulk of the saving bank clientele, are not losing their saving capacity.