Italians Spend 20% More Than Their Tax Declarations

by Ulrika Lomas, Tax-News.com, Brussels

14 September 2009

In comparing data on consumer spending against income tax declarations, it appears that Italians, in general, spend around 20% more than they declare to the Italian Revenue Agency.

That is, however, only an average statistic derived from latest available breakdown for 2007. From the reported figures, in Calabria, for example, the difference between expenditure and declared tax reaches almost 50%, while the regions showing a difference of over 30% include other southern regions, such as Sicilia, Campania, and Puglia.

Smaller divergences are seen in the northern regions of Italy, where Lombardia, Piemonte and Emilia Romagna have differences of 5.8%, 13.3% and 14.6%, respectively. Apparently, the central regions are also in the central range of these statistics – for example, Lazio at 19.5%, and Marche at 18.8%.

There are, obviously, other factors involved in these figures, from cost of living and income divergences between the regions, to personal factors such as the use of savings, state assistances and borrowings.

However, overall figures available for 2008 show total consumer expenditure in Italy of EUR916bn (USD1,300bn), compared to taxable income declared of EUR770bn. The distance between those two totals is not far away from the more creditable measures of the underground economy in Italy, which usually vary from between EUR150bn to EUR200bn.

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