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Berlusconi vows to refund money from unpopular tax

Italy's former PM Silvio Berlusconi delivers a speech during a Popoplo Della Liberta rally on February 3, 2013, in Milan
Italy's former prime minister Silvio Berlusconi delivers a speech during a rally for the Popoplo Della Liberta party on February 3, 2013, in Milan. Berlusconi vowed Sunday to refund the money Italians have had to fork out for an unpopular property tax if

Former premier Silvio Berlusconi vowed Sunday to refund the money Italians have had to fork out for an unpopular property tax if his coalition wins this month's elections.

Speaking at a rally in Milan, Berlusconi vowed to scrap the levy and refund the taxes paid on primary residences in 2012 "as compensation for an erroneous decision by the state" -- to the tune of some four billion euros ($5.5 billion).

The promise was greeted with a standing ovation at the rally of his centre-right People of Freedom Party (PDL).

Berlusconi abolished the real estate tax, known as IMU, in 2008 but it was reinstated last year as part of Prime Minister Mario Monti's austerity budget in the crisis-hit country.

Berlusconi, who has had three stints as prime minister, said he would order the refund if he becomes "economy minister" in a government led by his protege Angelino Alfano following the February 24-25 election.

Berlusconi's centre-right coalition has been rising in the polls recently ahead of the general elections, narrowing the gap with the centre-left coalition that is tipped to win the polls.

Before announcing what Italian media labelled a "shock proposal", the flamboyant 76-year-old said the IMU stood for everything that was wrong with Italy in tough economic times.

"One should never touch the primary residence, which is the pillar on which families build," he said, asserting that the reintroduction of the tax had caused property values to plummet "by five to 20 percent", and had led to a drop in home sales and construction.

Premier Monti, who is himself running as leader of a centrist coalition in the upcoming elections, dismissed his predecessor's campaign promise on Sunday.

"Berlusconi governed for a number of years and never kept a single one of his promises," he said, adding: "Italians have a good memory."

Nichi Vendola, leader of the small Left Ecology Freedom party (SEL), also slammed the proposal, saying Italians had already lived through a "shock (lasting) 15 years during which the country became poorer and offered a precarious future for young people".

Berlusconi assured his supporters that the lost revenue from the tax refund would be covered through public spending cuts, raising taxes on cigarettes and gambling, and taxing the assets of Italians in Switzerland -- a tax he said would eventually bring in five billion euros a year alone.

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