Difference Between the Tax System - the United States vs Italy Case Study

Difference Between the Tax System - the United States vs Italy - Case Study Example The author notes that the assumption by the revenue authority is true as organizations understate their revenues in readiness for bargaining with the tax authority in the actual tax payable. The aim of the approach is to earn more tax from taxpayers, than the amount that the taxpayers would pay based on their returns. The approach has further been integrated in Italy’s corporate culture such that organizations would underestimate their income, while filing tax returns, in order to gain ground for negotiating the final payable amount (Brooks and Dunn, 2009). The revenue authority also expects higher tax payments than organizations’ reported values and final payable values establish benchmarks for future tax payable amounts. This approach, according to the writer, works well with Italian firms or foreign firms that can adjust to the Italian practice. Those that are rigid to follow legal and moral provisions of their native countries, however, find it hard to cope with tax demand in Italy. The author also notes that the revenue authority is willing to intimidate taxpayers to adjust to the system and embrace the negotiation approach. The example of an American general manager explains this as he receives intimidating notices following his failure to embrace the negotiation approach. When he finally visits the revenue authority’s office, they inform him of the need for dialogue (Brooks and Dunn, 2009). I agree with the writer’s proposition that the Italian culture of tax collection is different from approaches in jurisdictions, such as in the United States, and that such differences are likely to create challenges to stakeholders from the other jurisdictions. The existence of differences in other aspects of culture across nations informs my support for the author’s proposition. While some cultures value collectivism, other value individualism. Similarly, while culture in some nations allows for informal appreciations during or after contract formations, other cultures may consider such advances immoral.