The tax burden is also rising due to the fight against tax evasion. The figures in the Ministry of Economy and Finance’s report

One of the strongest criticisms levelled at the government by the opposition – which strikes a nerve with Italians in general and the centre-right electorate in particular – concerns the rise in the tax burden. It stood at 41.6 per cent in 2022, when the Meloni government took office, and is set to reach 43 per cent by the end of the parliamentary term in 2027 (DPFP forecast). Giorgia Meloni has justified this by arguing that it is due to (or attributable to) the rise in employment: the government has not raised tax rates; indeed, it has reduced the tax wedge, but the increase in tax and social security contributions from new jobholders has automatically raised the ratio of taxes and contributions to GDP. This argument, however, implies a negative effect on productivity: if new employees increase revenue by more than they boost GDP, it means that their average productivity is lower than that of existing employees.

Another point, touched upon in the recently approved Dpfp, cites the success of the fight against tax evasion as the cause: “The tax burden will increase very slightly compared with 2025, with efforts to combat tax evasion playing a decisive role.” This interpretation is confirmed by the Report on Tax Evasion, recently published by the Mef. 

This year’s MEF report on tax evasion analyses data relating to 2023 (the latest year available), but one section provides an analysis extending to 2025 on how efforts to combat tax evasion affect the tax burden. This is because, from the perspective of the public budget, tax revenue derived from compliance, prevention and anti-evasion measures constitutes a sort of windfall which – in the absence of other measures – contributes to an increase in the tax burden. If the results of the work carried out by the Revenue Agency, the Finance Police, the Customs Agency, INPS and INAIL remain constant relative to economic trends, then there is no impact on the tax burden. If, on the other hand, they change over time, then there is.

And what the MEF report does is precisely to examine the evolution over time of tax evasion recovery efforts in relation to GDP. What stands out is “the continuous and significant growth in revenue (both tax and non-tax) deriving from activities to promote compliance and to prevent and combat tax evasion, interrupted only during the four-year period 2018–2021 and now more than tripled, relative to GDP, compared with figures from the start of the century”, states the MEF report. In essence, whilst the recovery of tax evasion stood at 0.5 per cent of GDP in 2006, by 2025 it had reached 1.7 per cent. Growth has been steady over time, except for a dip in 2018–19 and a slump in 2020–21 to below 1 per cent (in this case due to Covid), before rising rapidly to 1.7 per cent in 2025, which is the highest rate in the series.

In the same chart, the report shows the trend in the tax burden both net and gross of revenue from the aforementioned activity, illustrating that whilst there has indeed been an increase in the tax burden in recent years, part of this is due to the intensified fight against tax evasion: without this, the so-called ‘net’ tax burden – that is, on those who pay their taxes regularly – would remain at 2021 levels.

Whilst this phenomenon partly supports the government’s narrative – as it explains part of the rise in the tax burden that is not due to tax increases – it also partly contradicts it. This is because, in this government’s narrative – as with all those that preceded it – the recovery of tax evasion should be used to reduce taxes for those who pay them regularly, whilst leaving the overall tax burden on the economy unchanged. Yet this has never occurred, even though the fight against tax evasion has been yielding good results over time.

According to the Report, in 2023 the tax and social security contribution gap fell within a range of between 107.9 and 112.8 billion euros. This figure remains very high – and is even rising in absolute terms – but it also reflects the increase in the tax base, due both to economic growth and – particularly in recent years – to inflation. Therefore, when this figure is expressed as a proportion of GDP, the tax gap in 2023 stood at 17.5 per cent, a decrease of 0.2 percentage points compared with 2022 and 2.5 percentage points compared with 2019. The report also highlights the achievement of the NRRP target, which required a reduction in the ‘propensity to evade’, calculated across all taxes, of at least 10 per cent on average over the two-year period 2022–2023, compared with the 2019 baseline. The latest figures show a 12 per cent reduction, exceeding last year’s forecast (-10.9 per cent).

The reduction “appears to be attributable, first and foremost, to the relative reduction in VAT, IRES and IRAP evasion”, writes the Ministry of Economy and Finance (MEF), whilst “the reduction in personal income tax (IRPEF) evasion on income from self-employment and business activities is more modest in relative terms”. This result stems from reforms implemented some time ago, which have significantly narrowed the VAT gap, bringing it closer to the European average through measures such as split payment, electronic invoicing and electronic payments.

This strategy, launched by the Renzi government, is continuing with measures such as the requirement to link POS terminals to cash registers, introduced at the start of 2026 and which, according to Il Sole 24 Ore, has brought to light an additional €11.8 billion in taxable income in the first eight months of the year. However, even this additional revenue, according to the Draft Fiscal Policy Framework (DPFP) recently approved by the government, will not be used to reduce the tax burden.