Italy proposes lowering tax compensation threshold to combat evasion

The Meloni government is considering a proposal to lower the threshold for tax compensation to help fund the 2027 budget. Under the current rules, taxpayers with debts of up to 50,000 euros can use tax credits to offset their liabilities. The government aims to reduce this limit to 30,000 euros for those with outstanding debts to the Treasury.

This measure is part of a broader effort to recover funds lost to tax evasion, which is estimated to reach nearly 107 billion euros annually in Italy. While local municipalities can receive a percentage of recovered funds through qualified reports to the Revenue Agency, recent data shows that only a small fraction of Italian communes have actively participated in these efforts to combat fiscal infidelity.