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Taxation and Finance
The special autonomy with which the Province of South Tyrol has been equipped does not include - except in the few cases provided for in the Statute in which it can exercise a limited tax sovereignty - the field of taxation. In general it is the responsibility of the state to introduce and administer all taxes and charges, assessing taxes and collecting them through its own laws and its own offices. The finances of the Province of Bozen thus depend, as do those of all the other regions, provinces and municipalities of Italy, on the state. For coping with the necessary expenditure of the Italian regions and the other public bodies, their own tax returns have been completely inadequate. These administrations are therefore almost exclusively dependent on money allocated by the state. Also the financial and taxation autonomy, laid down in the constitution by the constitutional reform of 2001, can be realised only within the taxation system laid down and regulated by the state.
With regard to the finances of the Autonomy Province of Bozen, the Statute lays down three important principles:
- To the Province goes nearly all the tax revenue collected by the state in South Tyrol, as well as that collected outside it in so far as the income or expenditure involved relate to activities connected somewhere within the territory of the Province. The state merely retains a portion in order to cover the assessment and collection costs; on average this amounts to one-tenth of revenue.
- The allocation of financial resources to the Province must take place at regular periods and for the most part is in no way earmarked. In the field of expenditure therefore the Province disposes of a complete autonomy.
- The financial system of the Autonomous Province of Bozen cannot be altered without the agreement of the Province.
In addition to the funds from the state tax revenue the Province is also entitled to the contributions collected in the territory of the Province by welfare institutions for the financing of the health service. Furthermore the Province receives a share of grants guaranteed by the state and the European Union, for the implementation of special programmes in the social and economic sectors. Since 1998, the demand of the South Tyrolese politicians for an own tax sovereignty of the Province has become louder.
In 2001, the Province has a budget of 6,130 billion lire at its disposal. This is the first economy budget of the Province.
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