The uncollected VAT in Italy in 2023 amounts to 25 billion euros: a figure that remains high, although a clear improvement compared to pre-pandemic levels with a gap between potential and collected revenue standing at 15%, compared to 14.5% in 2022 and 19.3% in 2019.
The European Commission report “Mind the Gap”
And the preliminary estimate for 2024 indicates a slight rise to 15.3%, signaling how the progress of recent years remains exposed to cyclical and structural factors. The data emerges from the European Commission’s ‘Mind the Gap’ report, published for the first time together with two technical studies that offer a complete mapping of fiscal losses in the Union.
In a European comparison, Italy is above the EU average, which in 2023 records a missing VAT equal to 9.5% of potential revenue, confirming a still significant gap compared to the more virtuous countries.
The European picture and the increase in the gap in 2023
At EU level, the overall gap on potential VAT revenue rose to 128 billion euros in 2023, compared to around 101 billion in 2022, interrupting the recovery path started after the pandemic crisis.
Digitalization and Superbonus among the recovery factors
According to Brussels, the worsening is linked to the slowdown of the economy, the increase in bankruptcies and the easing of extraordinary measures that had temporarily favored compliance with tax obligations. For Italy, the Commission recognizes “significant improvements” in collection, supported in particular by the digitalisation of the tax system.
The new pressures on revenue in 2023
Electronic invoicing, the extension of traceable payments and the introduction of the pre-compiled VAT return in 2023: «They have strengthened the administration’s control capacity and reduced the scope for non-compliance».
A significant contribution also came from the 110% Superbonus, which between 2021 and 2022 favored the emergence of the tax base in the construction sector, traditionally more exposed to tax evasion. In 2023, however, the effect of these levers has weakened, as rising insolvencies and slower growth in electronic payments have put new pressure on the gap.
The structural fragilities of the Italian tax system
In the European panorama, the most virtuous countries remain Austria, Finland and Cyprus, while Romania and Malta record the highest levels of missing VAT. The report also recalls the structural fragilities of the Italian tax system: a still large underground economy, strong regulatory complexity and the very high weight of tax incentives, which by 2025 will result in over 119 billion euros of lost revenue.
European perspectives on digital VAT
Although it does not constitute evasion, the Commission observes that “the breadth and fragmentation of the benefits reduce the overall efficiency of the system”. According to European Commissioner Wopke Hoekstra, reducing tax gaps is “essential for European competitiveness” and allows resources to be recovered without increasing tax pressure.
With the package on VAT in the digital age (“Vida”) and the near real-time exchange of transaction data, Brussels aims to strengthen compliance and turn recent progress into structural and lasting results in reducing missing VAT.