Sardinian yacht tax faces challenge in court

The decision by Sardinia's governor Renato Soru to tax rich visitors who come to the island in large yachts or own holiday homes is being challenged in Italy's Constitutional Court.

The centre-left government of Romano Prodi says it is not opposed to the tax on principle but says its "discriminatory" nature - which would normally be termed progressive - is unconstitutional. It also fears that if the tax goes unchallenged it will encourage other regions to adapt ways of raising revenue locally, potentially clashing with the central government's plans.

Mr Soru, 49, the billionaire founder of the internet service provider Tiscali before he entered regional politics, announced the heavy new harbour dues for non-Sardinian boats last summer. It was his latest raid on the upmarket tourist economy that has brought flocks of wealthy people to the island. The most prominent is Silvio Berlusconi, whose favourite holiday home is a huge villa near Portorotondo. The marina there and the chic holiday villas around it were developed by the Aga Khan. It has become one of the glitziest watering holes in the country.

Immediately screams of pain went up from the billionaires whose floating palaces crowd the Costa Smeralda's marinas.

Daniela Santanche, an MP with the post-Fascist Alleanza Nazionale party and the owner of a yacht, said: "I am giving up my usual Sardinian holiday, all thanks to Soru and his taxes. I'll take the boat to Corsica and Sicily instead and spend only a few days in the island I love.

"It's a gesture of protest against a tax which is going to ruin the tourist industry and that of ships and ports. It's madness and a taste of what we can expect with the left in government."

The new tax was announced weeks after Mr Soru said he was putting a 20 per cent tax on the buying and selling of second homes within 3km (1.8 miles) of the sea. Both levies are consistent with his strategy of protecting Sardinia's superb coastline from further development.

His first act in power was to ban all new building within 2km of the coast. "This is a measure," he said at the time, "that will protect Sardinia and Sardinians for the next 500 years."

Defending his tax on rich visitors, Mr Soru said: "The contribution we are asking for is less than one day of fuel for a boat of that kind. It's not a tax on luxury as such: we don't tax all luxury items. If you go into a restaurant in Sardinia it can cost €5,000 for a meal - and not because there's any kind of a tax imposed by the region."

Regarding the tax on second homes, he said it was fair to ask for a "rather modest" tax contribution from home-owners who only visited their properties for a few weeks a year.

He said 25 per cent of revenue raised would be spent on environmental protection, and the rest on developing the largely empty, sparsely populated interior.