The estimate of the tax gap: An application in Tuscany

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).