VAT: Italy champion of Europe… of tax evasion: the worst among the 5 big ones
Among the five main European countries, Italy has the worst data regarding VAT evasion. Despite the progress recorded in 2022, with a reduction in the VAT gap from 21.5% in 2021 to 10.8%, the gap remains the highest compared to Germany, France, Spain and the Netherlands.
Italy has a potential revenue of 135.58 billion euros against 120.98 billion actually collected, and a gap of 14.6 billion. This is what emerges from a report by the Unimpresa Study Center, according to which, comparing the Italian data with that of Germany, a significant disparity emerges.
Germany it has a VAT gap of 2.8%, with a potential revenue of 266.85 billion euros and 259.39 billion actually collected and a gap of 7.4 billion.
France too, despite having had problems in the past, it has achieved better results than Italy, so much so that the French VAT hole has fallen from 8.5% to 4.9% in 2022, with a potential revenue of 194.28 billion euros and 184.73 billion actually collected and a shortfall of 9.5 billion.
Spain, however, represents a real success story, considering reducing the VAT shortfall from 5.5% to 0.8% and a hole of just 660 million: potential revenue of 82.91 billion euros and 82.25 billion actually collected.
The Netherlands, with a gap of 0.2%, stands out as the country with the lowest VAT gap among the major European countries. Potential Dutch revenue is 65.25 billion euros, with 65.40 billion actually collected, a sign of an extremely efficient tax system and high taxpayer compliance. If the comparison is extended to three other medium-sized countries of the European Union, Italy is second only to Greece in terms of inefficiency in VAT collection.
Greece, with a gap of 17.8% and a potential revenue of 18.17 billion euros against 14.94 billion collected, continues to struggle with serious structural problems that hinder the full effectiveness of its fiscal policies. Belgium, with a gap of 6.9%, showed an improvement compared to 13.6% in 2021. Its potential revenue is 36.83 billion euros, with 34.30 billion actually collected. Although there has been progress, the gap still remains higher than in many other European countries.
Portugal has closed the gap from 7.0% to 3.6%, with potential revenues of 19.82 billion euros and 19.11 billion actually collected.
“The improvement of the VAT gap in Italy, which fell from 21.5% to 10.8% between 2021 and 2022, must represent a further stimulus for the government to continue along the path of reform and simplification. The reduction of tax rates, combined with the simplification of VAT rules, represents a crucial step towards a fairer and more efficient tax system. It is essential to continue to make life simpler for taxpayers, especially for professionals and VAT numbers, by reducing bureaucracy and improving transparency. Only in this way will it be possible to consolidate the positive trend, recover further revenues and support the country’s economic growth. The government must work hard to complete these reforms, ensuring that the benefits reach all sectors of society, promoting a more favorable tax environment and encouraging voluntary compliance”, comments the president of Unimpresa, Giovanna Ferrara.
According to the Unimpresa Study Center, which developed data from the Court of Auditors, the data relating to 2022 on VAT revenue in Europe show significant differences between the various countries, both in terms of potential revenue and revenue actually collected. The ranking of countries based on the VAT gap shows notable disparities. The total for all the countries considered shows a potential revenue of 1,136.38 billion euros, with a collected revenue of 1,075.78 billion euros, generating an overall gap of 60.60 billion euros, equal to 5.3%. This figure represents an improvement compared to the previous year, indicating progress in reducing tax losses due to the VAT gap.
In the ranking on VAT evasion, Romania is in first place, with a gap of 36.7%. With a potential collection of 24.51 billion euros and a collected revenue of only 15.51 billion euros, the absolute gap amounts to 9.00 billion euros. Malta follows with a gap of 25.6%, corresponding to 0.35 billion euros out of a potential revenue of 1.35 billion euros, and Greece with a gap of 17.8%, equal to 3.23 billion euros. euros on a potential revenue of 18.17 billion euros. Lithuania has a gap of 14.5%, with a potential revenue of 5.48 billion euros and a collected revenue of 4.69 billion euros, generating a gap of 0.79 billion euros. Italy, with a gap of 10.8%, follows in fifth place. The potential Italian revenue is 135.58 billion euros, while the revenue collected is 120.98 billion euros, leaving a gap of 14.60 billion euros. Slovakia ranks sixth with a gap of 10.6%, equal to 0.87 billion euros on a potential revenue of 8.24 billion euros.
The Czech Republic has a shortfall of 7.0%, corresponding to 1.36 billion euros on a theoretical collection of 19.44 billion euros. Latvia has a hole of 7.3%, with a potential revenue of 3.08 billion euros and a collected revenue of 2.85 billion euros, generating a gap of 0.23 billion euros. Cyprus has a gap of 8.2%, with a potential revenue of 2.38 billion euros and a collected revenue of 2.18 billion euros, for a gap of 0.20 billion euros.
Bulgaria shows a gap of 4.9%, equivalent to 0.35 billion euros on a potential revenue of 7.02 billion euros. France, with a gap of 4.9%, has a potential revenue of 194.28 billion euros and a collected revenue of 184.73 billion euros, with a gap of 9.55 billion euros. Belgium has a gap of 6.9%, with a potential revenue of 36.83 billion euros and a collected revenue of 34.30 billion euros, leaving a gap of 2.53 billion euros. Ireland, with a gap of 6.7%, has a potential revenue of 16.71 billion euros and a collected revenue of 15.59 billion euros, for a gap of 1.12 billion euros. Croatia shows a gap of 5.7%, corresponding to 0.46 billion euros out of a potential revenue of 8.11 billion euros.
Denmark has a hole of 5.0%, with a potential revenue of 35.40 billion euros and a revenue collected of 33.62 billion euros, leaving a gap of 1.78 billion euros. Hungary has a gap of 4.4%, equal to 0.71 billion euros on a potential collection of 15.94 billion euros. Poland shows a gap of 3.3%, with a potential revenue of 51.01 billion euros and a collected revenue of 49.32 billion euros, for a gap of 1.69 billion euros. Sweden has a gap of 3.8%, corresponding to 1.94 billion euros out of a potential revenue of 51.15 billion euros. Austria has a gap of 2.8%, with a potential revenue of 31.55 billion euros and a collected revenue of 30.67 billion euros, leaving a gap of 0.88 billion euros. Germany has a gap of 2.8%, with a potential revenue of 266.85 billion euros and a collected revenue of 259.39 billion euros, for a shortfall of 7.46 billion euros. Slovenia has a gap of 2.0%, corresponding to 0.09 billion euros out of a potential revenue of 4.39 billion euros. Estonia has a gap of 1.4%, with a potential revenue of 2.89 billion euros and a collected revenue of 2.85 billion euros, leaving a gap of 0.04 billion euros. Luxembourg has a gap of 1.6%, corresponding to 0.07 billion euros on a potential collection of 4.41 billion euros. The Netherlands shows a very low gap, of 0.2%, with a potential revenue of 65.25 billion euros and a collected revenue of 65.40 billion euros, for a gap of 0.15 billion euros.
Finland stands out with the lowest gap, of 0.4%, on a potential revenue of 23.64 billion euros and a revenue collected of 23.55 billion euros, leaving a gap of only 0.09 billion euros. The total for all the countries considered shows a potential revenue of 1,136.38 billion euros, with a collected revenue of 1,075.78 billion euros, generating an overall gap of 60.60 billion euros, equal to 5.3%. This figure represents an improvement compared to the previous year, indicating progress in reducing tax losses due to the VAT gap.
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