Italy: 25 billion euro of uncollected VAT and the comparison with Europe
The EU report highlights an above-average Italian VAT gap, with causes linked to the economic slowdown and changing digital payment dynamics.
Key points
In Italy, uncollected VAT remains high, albeit significantly lower than before Covid. In 2023, the gap stood at 15%, or approximately EUR 25 billion in uncollected revenue, compared to 14.5% in 2022 and 19.3% in 2019. The preliminary estimate for 2024 indicates a further slight increase to 15.3%. The figures emerge from the Mind the Gap report, published for the first time by the EU Commission together with two technical reports for a comprehensive mapping of tax losses in the EU. In the European comparison, Italy is above the EU average of 9.5 per cent of potential revenue from missing VAT.
The European situation
At the EU level, the gap in total potential revenue increased to EUR 128 billion in 2023 (compared to around EUR 101 billion in 2022), marking a reversal after the strong recovery in 2021-2022. According to the Commission, the economic slowdown, the increase in bankruptcies and the fading of some extraordinary factors that had favoured tax compliance explain part of the deterioration. The report points out that in Italy, the reduction in missing VAT observed between 2021 and 2022 coincided with the extension of electronic invoicing, the growth of digital payments and, above all, with the 110% Superbonus, which incentivised the emersion of the tax base in a sector traditionally exposed to evasion such as construction. In 2023, however, the effect of these measures weakened, while the increase in bankruptcies and the lower growth of electronic payments put new pressure on the gap.
Other countries
In the European panorama, the most virtuous countries remain Austria (1%), Finland (3%) and Cyprus (3.3%), with very low levels of missing VAT, while Romania (30%) and Malta (24.2%) register the highest gaps. Italy is in an intermediate range, but far from the best performers. For Brussels, reducing missing VAT is a key lever not only to strengthen public finances, but also to support competitiveness and the proper functioning of the single market, in a context of increasing digitisation and exchange of tax data.
