Italy tax evasion: Municipalities report minimal recoveries

A report by the CGIA di Mestre highlights a significant gap between Italy's estimated annual tax evasion of 107 billion euros and the minimal efforts made by local municipalities to combat it. In 2024, only 304 out of approximately 7,900 Italian municipalities (3.8%) submitted qualified reports to the Revenue Agency, resulting in a collective recovery of only 5 million euros.

Regional data shows varying levels of economic irregularity. Calabria faces severe challenges, with an unobserved economy representing 19% of its regional value added and an estimated 3.282 billion euros lost annually to taxes and contributions. In Abruzzo, irregular employment affects 11.2% of workers, and the shadow economy accounts for 13.4% of regional value added. Molise also reports high irregularity rates at 12.6%, while Veneto shows lower levels of evasion and illegal construction compared to the national average.

Under current regulations, municipalities that report tax infidelity can receive 50% of the assessed amount, though this rate is set to return to 100% this year. Despite this financial incentive, many provincial capitals and regional centers remain inactive in reporting fiscal irregularities.