Tax and contributions, 82.4 billion evaded. VAT gap halved

Sometimes it can be a matter of perspective. But the numbers speak for themselves. The tax and contribution gap, i.e. the share that still escapes compared to what the IRS and INPS think they collect, is still very high in Italy but is significantly decreasing, not least because one of the cornerstones on which evasion is based, such as VAT, is now on a consolidated downward trend thanks to the anti-fraud and technological tools that have been put in place.

The latest report on the unobserved economy and tax and contribution evasion by the commission set up at the Ministry of the Economy, which runs in parallel with the Structural Budget Plan (Psb), reports that the latest available figure for 2021 on how much escapes from the Treasury totals 82.4 billion euro. An enormity, still. The glass, however, is half full, because if we look at the dynamics of the last five years (i.e. from 2017 onwards) the gap is narrowing: almost 26 billion euro.

Weighing in on this drop by around 70% is the reduction in VAT evasion, which according to the report (the measurement system differs from that used in the EU) has gone from 35.6 to 17.8 billion euro: in practice, it has halved. Since, however, all signs should be taken into account and not only the encouraging ones, it should be noted that between 2020 (a highly anomalous year because it was characterised by the heaviest restrictions due to the pandemic) and 2021, the indicator relating to the measurement of VAT evasion owed by the self-employed and businesses rose again by almost 1.5 billion.

Returning to VAT, as the report of the committee chaired by Nicola Rossi explains, 'the strong recovery of compliance in terms of the reduction of the undeclared gap is probably attributable to the measures to combat evasion that followed between 2017 and 2021: the widening of the split payment in 2017, and the introduction of electronic invoicing for certain categories of subjects in 2018 and its generalisation in 2019'. There is also another aspect that may have had an influence, obliging the traceability of payments and thus having an effect in terms of conflicting interests. In fact, in 2021 the propensity to evasion was reduced by about 3.4 percentage points compared to 2020, or about 2.8 billion. The report explains how this can be the result of the 'introduction of measures strengthening the traceability of transactions, such as the extension to all operators of the telematic transmission of receipts and incentives to use electronic instruments in transactions, as well as the extension of building bonuses'.

The declared VAT increase has brought down the propensity to evade. However, to clear the field in advance of any controversy and avoid instrumentalisation on a minefield, the commission specifies that 'the assessment of the overall impact on public finance of the aforementioned measures is not among the objectives of this report, which focuses exclusively on tax evasion'. Also because then the effect of the use of tax credits or deductions generated by those bonuses could be passed on to subsequent years, on which there will only be data in the future. And, in any case, in the part dedicated to the results achieved in the fight against evasion, there is a chapter expressly dedicated to fraud on tax credits for building work and energy.