Income filings raise questions of tax dodging

A cursory look at tax filings in 2022 raises suspicions of widespread tax evasion, especially among the self-employed. 

In many cases, it is difficult to reconcile the declared sums with people surviving, let alone making a decent living on their declared incomes.

Also, since the government bases its welfare policies on those declared incomes, a lack of truthful filings skews that policy.

It stretches credulity, for example, to believe that 40% of households have an annual income below €5,000 or that only 17% of those who filed tax declarations earn over €20,000.

Salaried employees and pensioners, whose income is taxed before they are actually paid, have little leeway to conceal income, unless they have a second job where they are paid under the table or hide income for rent on their properties; however, given that the renters also declare rent payment expenditure, the latter tactic is a risky proposition.

Of the 6.47 million who filed tax returns in 2022, 2.558 million, or 39.53%, declared household income below €5,000; among those, 660,000 declared zero income.

The latter number, of course, includes young people who have not yet entered the job market but who are obliged, as long as they reached maturity, to file returns regardless. But they cannot account for 10% of the total.

Another 1.263 million (19.52%) declared household income from €5,000 to €10,000, 876,000 (13.54%) from €10,000 to €15,000, 659,000 (10.18%) from €15,000 to €20,000, 594,000 (9.20%) from €20,000 to €30,000, 388,000 (5.99%) from €30,000 to €50,000, 106,000 (1.64%) from €50,000 to €100,000, and 27,000 (0.42%) over €100,000.

Also, among the 101,437 businesses, most of them small, personal ones, 47,222 declared losses.

The total declared income, about €79.27 billion, is €1 billion higher than 2019, the last year before the pandemic.