Italy Updates Tax Gap Stats

A report from Italy’s Minister of the Economy and Finance says the annual Italian “tax gap” – the revenue lost due to tax breaks, avoidance, and evasion – totalled EUR91.3bn, or 6.6 percent of the country’s gross domestic product, during the period 2007-2013.

This represents a fall from the EUR93.5bn gap calculated for the five years 2001-2006, which equalled 7.6 percent of GDP. The figures do not include social security contributions.

Value-added tax was the levy with the largest tax gap, with EUR40.2bn going uncollected annually. While its tax gap for value-added tax is the fifth highest in the EU, Italy loses relatively more to VAT evasion than any other member state.

The report says that while relatively more tax is evaded in the Northern regions of Italy, due to their wealth, a significantly larger proportion of tax goes unpaid in the South.

The report said that the additional revenue collected by the Italian Revenue Agency from its actions against tax evasion reached EUR14.2bn in 2014, an increase of EUR1.1bn, or 8.4 percent, over the amount achieved in 2013.