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Tax Evasion in Italy


  • Massimo Bordignon

    () (Università Cattolica di Milano)

  • Alberto Zanardi

    (Bocconi University)


We perform a detailed analysis of the phenomenon of tax evasion in Italy, looking for determinants and policy solutions. We first discuss the characteristics of the tax system, the coercive system and the economic structure; we then investigate empirically the determinants of personal income tax evasion, building to this aim a microeconometric analysis based on the results of the actual detection policy. A few determinants of tax evasion are singled out by the analysis: the inefficiencies of tax administration, the high progressivity of the personal income tax, the characteristics of the plea-bargaining system and the widespread use of tax amnesties. Accordingly, we propose a number of policy actions aimed to remove these factors.

Suggested Citation

  • Massimo Bordignon & Alberto Zanardi, 1997. "Tax Evasion in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 56(3-4), pages 169-210, December.
  • Handle: RePEc:gde:journl:gde_v56_n1-2_p169-210

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    References listed on IDEAS

    1. Allison C Schrager & George A Mackenzie, 2004. "Can the Private Annuity Market Provide Secure Retirement Income?," IMF Working Papers 04/230, International Monetary Fund.
    2. Carlo Mazzaferro & Marcello Morciano, 2011. "Measuring intra-generational and inter-generational redistribution in the reformed Italian social security system," Working Papers 11, Department of the Treasury, Ministry of the Economy and of Finance.
    3. Giuseppe Carone & Herwig Immervoll & Dominique Paturot & Aino Salomäki, 2004. "Indicators of Unemployment and Low-Wage Traps: Marginal Effective Tax Rates on Employment Incomes," OECD Social, Employment and Migration Working Papers 18, OECD Publishing.
    4. Chłoń-Domińczak, Agnieszka & Strzelecki, Paweł, 2013. "The minimum pension as an instrument of poverty protection in the defined contribution pension system – an example of Poland," Journal of Pension Economics and Finance, Cambridge University Press, vol. 12(03), pages 326-350, July.
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    6. Cannon, Edmund & Tonks, Ian, 2003. "UK annuity rates and pension replacement ratios 1957-2002," LSE Research Online Documents on Economics 24832, London School of Economics and Political Science, LSE Library.
    7. Monika Queisser & Edward R. Whitehouse, 2006. "Neutral or Fair?: Actuarial Concepts and Pension-System Design," OECD Social, Employment and Migration Working Papers 40, OECD Publishing.
    8. Mazzaferro, Carlo & Morciano, Marcello & Savegnago, Marco, 2012. "Differential mortality and redistribution in the Italian notional defined contribution system," Journal of Pension Economics and Finance, Cambridge University Press, vol. 11(04), pages 500-530, October.
    9. repec:mod:cappmo:0035 is not listed on IDEAS
    10. Giovanni Guazzarotti & Pietro Tommasino, 2008. "The Annuity Market in an Evolving Pension System: Lessons from Italy," CeRP Working Papers 77, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    11. Baldini Massimo & Mazzaferro Carlo & Morciano Marcello, 2008. "Assessing the implications of long-term care policies in Italy: a microsimulation approach," Politica economica, Società editrice il Mulino, issue 1, pages 47-72.
    12. Edward R. Whitehouse, 2010. "Decomposing Notional Defined-Contribution Pensions: Experience of OECD Countries' Reforms," OECD Social, Employment and Migration Working Papers 109, OECD Publishing.
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    Cited by:

    1. Galbiati, Roberto & Zanella, Giulio, 2012. "The tax evasion social multiplier: Evidence from Italy," Journal of Public Economics, Elsevier, vol. 96(5), pages 485-494.
    2. Luigi, Bernardi, 2002. "Tax systems and tax reforms in Europe: Italy," MPRA Paper 18045, University Library of Munich, Germany.
    3. Bruno Chiarini & Elisabetta Marzano & Friedrich Schneider, "undated". "Tax rates and Tax evasion: an Empirical Analysis of the Structural Aspects and Long-Run Characteristics in Italy," Working Papers wp2009-1, Department of the Treasury, Ministry of the Economy and of Finance.
    4. Kastlunger, Barbara & Lozza, Edoardo & Kirchler, Erich & Schabmann, Alfred, 2013. "Powerful authorities and trusting citizens: The Slippery Slope Framework and tax compliance in Italy," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 36-45.
    5. Wang, David Han-Min & Lin, Jer-Yan & Yu, Tiffany Hui-Kuang, 2006. "A MIMIC approach to modeling the underground economy in Taiwan," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 371(2), pages 536-542.
    6. Massimo Bordignon & Silvia Giannini & Paolo Panteghini, 2001. "Reforming Business Taxation: Lessons from Italy?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(2), pages 191-210, March.
    7. Matsaganis, Manos & Benedek, Dóra & Flevotomou, Maria & Lelkes, Orsolya & Mantovani, Daniela & Nienadowska, Sylwia, 2010. "Distributional implications of income tax evasion in Greece, Hungary and Italy," MPRA Paper 21465, University Library of Munich, Germany.
    8. Raffaella Basile & Bruno Chiarini & Elisabetta Marzano, 2011. "Can we Rely upon Fiscal Policy Estimates in Countries with Unreported Production of 15 Per Cent (or more) of GDP?," CESifo Working Paper Series 3521, CESifo Group Munich.
    9. Yu, Tiffany Hui-Kuang & Wang, David Han-Min & Chen, Su-Jane, 2006. "A fuzzy logic approach to modeling the underground economy in Taiwan," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 362(2), pages 471-479.
    10. Luigi Bonaventura, 2011. "Enforcement of regulation, irregular sector, and firm performance: a computational agent-based model," Netnomics, Springer, vol. 12(2), pages 99-113, July.
    11. Angel Alanon & M. Gomez-Antonio, 2005. "Estimating the size of the shadow economy in Spain: a structural model with latent variables," Applied Economics, Taylor & Francis Journals, vol. 37(9), pages 1011-1025.
    12. Massimo Bordignon, 2000. "Problems of Soft Budget Constraints in Intergovernmental Relationships: The Case of Italy," Research Department Publications 3099, Inter-American Development Bank, Research Department.
    13. Carlo V Fiorio & Francesco D'Amuri, 2005. "Workers' Tax Evasion in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(2-3), pages 247-270, November.

    More about this item


    tax evasion; tax administration; income tax; presumptive taxation;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance


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