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The estimate of the tax gap: An application in Tuscany

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  • Leonardo Ghezzi
  • Letizia Ravagli
  • Stefano Rosignoli
  • Nicola Sciclone

Abstract

The methods generally used to estimate the loss of revenue from tax evasioncan be divided into two types: the macroeconomic approach (or top-down) and the micro (orbottom-up). The first is based on a comparison between fiscal data from Ministry of Financeand aggregate data from national accounts; the second compares the income declared by thetaxpayer at a micro level with those obtained through sample surveys or those observed afterthe auditing activity of the tax authorities.This paper presents some preliminary results of the tax gap estimate in Tuscany forthree kinds of levies. As regards the personal income tax (IRPEF) we use a micro approachby comparing the tax estimated in the survey on Income and Living Conditions (EU-SILC)(where the gross income is bound to National Accounts) and fiscal data from Ministry of Finance.In order to estimate the tax evasion on the regional tax on productive activities (IRAP)we use a macro approach which compares the aggregate tax base from regional input-outputtables and the one from Ministry of Finance. Finally we propose an estimate of tax evasionon the municipal property tax (ICI) by comparing the revenues estimated in the Italian landregister (Catasto) and those resulting from the municipalities' balances (Certificati Consuntividi Bilancio).

Suggested Citation

  • Leonardo Ghezzi & Letizia Ravagli & Stefano Rosignoli & Nicola Sciclone, 2013. "The estimate of the tax gap: An application in Tuscany," Politica economica, Società editrice il Mulino, issue 1, pages 91-118.
    • Handle: RePEc:mul:je8794:doi:10.1429/75053:y:2013:i:1:p:91-118
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    References listed on IDEAS

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    1. 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.
    2. M. Rosaria Marino & Roberta Zizza, 2012. "Personal Income Tax Evasion in Italy: An Estimate by Taxpayer Type," Chapters, in: Michael Pickhardt & Aloys Prinz (ed.), Tax Evasion and the Shadow Economy, chapter 3, Edward Elgar Publishing.
    3. Guerino Ardizzi & Carmelo Petraglia & Massimiliano Piacenza & Gilberto Turati, 2014. "Measuring the Underground Economy with the Currency Demand Approach: A Reinterpretation of the Methodology, With an Application to Italy," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 747-772, December.
    4. Gianni Betti & Maria Luisa Maitino & Nicola Sciclone, 2012. "A che cosa servono i modelli di microsimulazione? Tre applicazioni usando microReg," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2012(2), pages 101-119.
    5. R. Paci & N. Pusceddu, 1999. "Lo stock di capitale fisso nelle regioni italiane. 1970 - 1994," Working Paper CRENoS 199908, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
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