ROME: Economy Minister Pier Carlo Padoan convened Italy’s top tax collection officials to put in place new measures to recover some €6 billion in revenue from fighting VAT evasion over the next two years, hoping to close a tax gap that in 2014 totaled about €40 billion euro.
The plan is to fight all types of VAT fraud, by requiring electronic invoicing in transactions in the private sector, and also by broadening the range of action.
The battle against tax evasion was given a general outline in the first meeting of a committee set up by Padoan that took place yesterday morning. Attendees included, among others, the vice minister for tax policies Luigi Casero, the general commander of the financial police (Guardia di Finanza) Giorgio Toschi, the head of the cabinet at the Ministry of Economy and Finance Roberto Garofoli, the director of the Italian Revenue Agency, Rossella Orlandi, the director of Customs, Giuseppe Peleggi, the president of the committee for the annual report of fiscal expenditures, Mauro Marè, and the director general of Finance, Fabrizia Lapecorella.
The reduction in the tax gap, or the difference between taxes that were actually paid and taxes that should have been paid if tax law was strictly adhered to, is the main goal invoked by Padoan.
The latest estimates available are from 2014 and refer to a differential for VAT of about €40.2 billion. In reality, this figure has already deceased thanks to measures adopted in the most recent budget plans.
Fraud, evasion and missed payments will also be fought by a better use of information technology. The Treasury wants to step up the use of electronic invoicing, and is seeking a compromise with Brussels to allow Italy to lift the EU ban on making electronic invoicing mandatory.
At the same time, Italy aims to strengthen the rewarding mechanisms for taxpayers that work hand in hand with authorities, such as fewer audits.
The Treasury has high hopes for the risk analysis which is already starting to show results in terms of real estate sales and the motor trade.
In order to reduce the phenomenon of so-called “carosel fraud,” cooperation must also be strengthened with other international tax authorities.
