Tremonti is killing the third sector

Italy’s “5 per mille” has been cut to the bone. The tax law enables tax payers to destine 0.005 per cent of their income tax to a charity of their choice and provides an important source of funding to thousands of Italian organisations. But the government has only earmarked 100 million euros to cover the cost of the 5 per mille despite predictions that at least four times as much will be needed. The result? The activities of millions of volunteers and thousands of non profit groups are at risk and taxpayer freedom of choice is being infringed. 

The 5 per mille allows Italian tax payers to devolve a small percentage of their income tax to support organisations that carry out “good” social and environmental activities. Charities aren’t the only ones to benefit from the 5 per mille, so do scientific research institutions, hospitals, sports organisations, cultural associations, museums and national parks. 

It has been around for more than five years but not only has the 5 per mille not become an actual law (unlike 12 other European countries where similar laws exist), but in the government budget, which is now under exam at the Italian senate, the coverage for the experimental measure (it’s been experimental for the past five years!), has been drastically reduced from 400 million euros to 100 million euros. 

That is to say that, from one day to the next, the 5 per mille may be turned into a “1.25 per mille” (ie: a little more than a fifth of the 5 per mille). In spite of the agreements made with taxpayers (more than 15 million citizens per year have taken advantage of this opportunity) and in spite of the agreements made with those non profit organizations committed in assistance, cultural promotion, scientific research (about 30 thousand organizations). The “5 per mille”, which could and should really be the cornerstone of State aid for non profit organizations, dies due to budget concerns. 

The days when the Minister of Economy and Finance Giulio Tremonti talked about giving back value and resources to the third sector as a form of investment for the Italian state and not as a cost seem so far away! There is only one chance for this government to show it has not spoken haphazardly during the last legislature: the government has to immediately present an amendment in which it earmarks at least 400 million euros for 2011.