Millionaires clash over Sardinian taxes

| Fri, 08/11/2006 - 12:04

Olbia, August 10 - Millionaires clashed this week over a spate of new taxes being levied on wealthy tourists holidaying on the island of Sardinia this summer .

The "luxury taxes", as they have been dubbed, were introduced in June and affect the owners of holiday homes, mega yachts and private planes .

Flamboyant millionaire playboy Flavio Briatore has declared war on the measures, saying that they are driving well-heeled tourists away .

The Renault Formula One team chief is holding a "protest party" against the taxes at his exclusive Billionaire nightclub on Sardinia's famed Emerald Coast on Thursday night .

Former premier and billionaire media magnate Silvio Berlusconi, who has had to fork out an estimated 54,000 euros in extra taxes for his 27-room villa on the coast, is among those expected to attend .

The taxes were introduced by Sardinia's left-wing regional government chief Renato Soru, himself a billionaire who made his money by creating Italian internet service company Tiscali .

Soru, who was elected in 2004, argues that the taxes will help conserve Sardinia's natural resources and will boost the flagging local economy .

"We want to preserve and protect the rare environmental and natural resources of our island's coastline. I think it's fair to ask those who benefit from these resources to contribute to their maintenance," Soru said when the taxes were first introduced .

He said affluent visitors were being charged "relatively small sums" and that "those who love this island will be happy to make a financial contribution" .

The 48-year-old governor also stressed that many of the 400,000 second homes located on Sardinia were part of the underground economy and hence the decision to levy a direct tax on them .

The property tax applies to all second homes built within three kilometres of the sea with the amount starting at 900 euros per year for a 60sq building and rising in accordance with size .

The tax on private planes and yachts bigger than 14 metres applies until the end of September .

Owners of yachts between 14m and 16m are required to pay 1,000 euros for mooring at any of the island's ports with a maximum of 15,000 euros levied on boats over 60m .

Boat owners are required to pay the tax in full, even for a one-day visit, within 24 hours of arriving on the island. Yachts that have contracts with marinas are excluded .

Briatore lashed out at the taxes in advertisements placed in several Italian papers on Wednesday, saying that rich people generated income for the island .

"Wealth is not a crime... The luxury taxes will bring money and development to France, Greece, Spain and Croatia but definitely not to Sardinia," he said .

Statistics appeared to show Briatore was partly right, with a sharp drop in the number of yachts putting in at the island .

Figures from 33% of the island's 47 ports showed a 61% drop in the number of yachts longer than 14m in June compared to the same month last year .

Italy's northeast Ligurian coast, meanwhile, attributed an unexpected 20% increase in the number of big yachts mooring at its ports to the Sardinian taxes .

Flying magazine Volare also reported that there had been a 25% fall in the number of private planes landing at the island's airport .

Nonetheless, Briatore's analysis left the island's millionaire population divided .

Tom Barrack, a billionaire Californian real estate investor who owns a string of Costa Smeralda resorts, said that affluent tourists were being asked to "pay a small price to enjoy and help preserve this island's unique beauty" .

Insisting that Sardinia remained "one of the most attractive destinations in the Mediterranean", he disputed claims that the wealthy were deserting the island .

He said his luxury hotels were full, with a 30% increase in the number of bookings this year compared to last. He also said the Emerald Coast marina had posted a 10% increase in the number of moorings .

Vincenzo Onorato, the owner of the Moby ferry company, said he also agreed with the taxes .

"Those who have houses here will continue to come... and we are talking about a small levy which only affects those with large financial resources," Onorato said .

Nonetheless, Briatore found an ally in Arzachena Mayor Pasquale Ragnedda .

Ragnedda, whose town is the 'capital' of the Emerald Coast, said that "Briatore is saying what we've been saying for months... We've based our successful tourism here on the middle to higher classes and this tax against the rich has done nothing but drive them away" .

"The poor certainly don't bring wealth (to the region)," the mayor said .

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