Italy tourism sector dodges billions of euros in taxes

ROME - Agence France-Presse

The Italian government is losing high amounts of revenues as many tourism facilities are avoiding to pay taxes. AFP photo

Italy’s tourism sector is dodging around 13.5 billion euros ($19.3 billion) in taxes this year by not declaring revenues, a study into the grey economy by the Cescat research group showed on Friday.

The study estimated that bars, restaurants, hotels and beach resorts had failed to declare around 36 billion euros in revenues so far in 2011.

The unpaid taxes from this undeclared revenue represent around a third of the 45.5-billion euro draft austerity budget adopted by the government earlier this month.

Small businesses

Cescat found the biggest tax evaders were small hotels, bed and breakfasts, beach resorts, bars and restaurants. It found tax evasion was highest in the south and on Italy’s picturesque islands -- reaching levels of around 35 percent.

The official turnover generated by Italian and foreign tourists in 2011 is put at 185 billion euros -- equivalent to 12 percent of gross domestic product, or GDP.

Tax evasion is estimated at around eight percent of output every year.

The government has promised to crack down on tax evaders in a bid to reduce Italy’s soaring public debt but campaigners are sceptical on implementation.