Italy’s coffers were down by €122 billion this year alone because of people and businesses failing to pay tax.
That figure was presented to the Italian government by the employers’ organisation Confindustria.
The government itself had previously estimated its tax loss as €90 billion a year. The report from Confindustria suggests the scale of tax dodging is noticeably greater than previously believed.
According to the organisation, the biggest losses, about one-third of the total, are due to non-payment of value added tax (€40 billion).
Failure to pay payroll taxes accounts for around €34 billion, followed by income tax payments of up to €23 billion.
The report pinned the blame on shortcomings in Italy’s tax administration.
"Controls are aimed at raising cash rather than having a deterrent effect, to the point that 99% of taxpayers risk being spot checked only once every 33-50 years," said Luca Paolazzi, one of the report's authors.
He said the government could do more to end endemic tax evasion by urging more companies to take up digital rather than paper VAT declarations. It should also encourage electronic payments rather than paper receipts for cash transactions.
