Italians are Europe’s worst tax-dodgers

Italy has the worst record in Europe for value-added tax evasion, costing the country €36.1 billion a year, according to a study by the European Commission.

Italians are Europe’s worst tax-dodgers
Photo: Julien Jorge/Wikicommons

France is the second worst, losing €32.2 billion a year, followed by Germany with a loss of €26.9 billion.

The losses are mainly due to fraud, although late payments, bankruptcies and administrative errors also play an important role, while economic context can also weigh, the report said.   The study covered 26 of the European Union’s current 28 members.

In total, VAT evasion cost EU countries almost €200 billion.

"The amount of VAT that is slipping through the net is unacceptable; particularly given the impact such sums could have in bolstering public finances," said EU Taxation Commissioner Algirdas Semeta.

Plagued by debt problems, strapped governments have latched on to boosting VAT as a way to bolster their strained public finances. The European Union bureaucracy itself is financed in part by a sizeable share of VAT collected on the national level. Missing revenue in member countries means less cash for Brussels as well.

The findings, which were first leaked to French newspaper Le Monde on Wednesday, have been bitterly contested in some European capitals with an unnamed official in Paris telling the newspaper the work was "not serious".

But European Commission spokeswoman Emer Traynor stood by the report – whose methodology was approved by member states – calling it "reliable" and based on national and Eurostat data.

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