Tax evasion is a serious problem with an estimated 25% of the economy remaining untaxed (cf 14% in France and 8% in the US). Unlike some other countries there is no social stigma attached to being a tax evader and if someone does pay full tax they are often regarded as somewhat foolish.
In 2010 an estimated 50bn euro was not paid, a rise of 46% on the previous year. Of this,
- 40% was owed by just 8,850 people
- 10bn euro was sent abroad with 5bn of this in Luxembourg or Switzerland
In 2006 an estimated 13 bn euro was evaded (of which 3.4 bn was recovered).
Tax evasion is endemic and tax inspectors have been known to turn a blind eye to small businesses after being offered a gratuity. Over the years various governments have brought in measures to reduce evasion, however most have been unsuccessful.
Tax amnesties occur regularly; in 2010, a tax amnesty brought back 95 bn euro into the system, for example. However, tax amnesties have led to many people avoiding tax for as long as they can until an amnesty comes in and they can wipe the slate clean.
Other measures include the raising of tax to make up the shortfall; however this leads to further evasion as taxes are seen to be too high.
Tax evasion has occured throughout history. In Venice evaders could be denounced through the Bocche dei leoni, a simple hole-in-the-wall where the names of evaders could be posted (as well as tax evaders, anonymous posters could make suggestions for local government and so on).
Equitalia - tax collection agency
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