Tax evasion rises to 112.8 billion, but decreases for self-employed workers

Tax evasion and social security contribution evasion in Italy has risen to 112.8 billion euros. The data emerges from the 2026 Report on the Unobserved Economy and Tax and Contribution Evasion published by the Ministry of Economy and Finance. In 2023, the latest available year, the overall tax gap is between 107.9 and 112.8 billion, recording an increase of 7.1-7.6 billion compared to 2022.

The main increases are in lost VAT revenue, which rose from 30.7 to 34.4 billion, and lost corporate income tax (IRES) revenue, which increased from 9.7 to 12 billion. In contrast, the personal income tax (IRPEF) gap for self-employed individuals and businesses shows a different trend, decreasing from 39.2 to 38.4 billion, almost one billion less than the previous year.

Tax evasion, meaning the difference between what the state should collect and what it actually receives, is a structural phenomenon in Italy that is monitored annually through the Ministry of Economy and Finance's Report. The measurement, called the 'tax gap,' considers both actual tax evasion and contribution evasion (unpaid contributions for pensions and other social benefits).

The report shows how, after the historic lows reached during the Covid-19 pandemic years for VAT, there has been a rebound. The overall increase of over 7 billion euros in one year is primarily driven by VAT and IRES (the corporate income tax). The decline in personal income tax evasion by self-employed individuals and businesses, on the other hand, represents a positive counter-trend data point, although the overall amount remains very high. These figures illustrate the ongoing challenge between the tax authorities and taxpayers in complying with tax obligations.