Workers' Tax Evasion in Italy

Carlo V. Fiorio () and Francesco D'Amuri ()

Giornale degli Economisti, 2005, vol. 64, issue 2-3, pages 247-270

Abstract: We apply a direct method to estimate tax evasion in Italy, assuming that tax evaders might consider declaring a closer-to-true income in an anonymous interview. The methodology is applied to employed and self-employed taxpayers, combining the Survey of Household Income and Wealth (SHIW) by the Bank of Italy and a large random sample of tax forms by SeCIT (Tax auditing office - Ministry of Finance), both referred to incomes received in 2000. Paying particular attention to the post-stratification of the data, we find that tax evasion is consistently higher for self-employment income than for employment income: the difference ranges from about 7% in lower deciles to 27% around the mode. This analysis shows that a relevant level of tax evasion arises also at low levels of employment income, although some under-sampling and misreporting problems need to be considered. An evaluation of the redistribution and incidence effects of tax evasion among workers is provided.

Keywords: tax evasion; post-stratification; microsimulation; redistribution (search for similar items in EconPapers)
JEL-codes: H26 D63 H24 (search for similar items in EconPapers)
Date: 2005
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