Tax evasion is a huge problem in Italy. By knowing how important a fiscal receipt is, and what it looks like, here’s how tourists can help.
Everyone knows that tax evasion is one of the biggest issues facing Italy's economy. But very few tourists to Italy know that they have the power to do something about it.
And should.
That's because tax evasion in Italy doesn't just happen in accountants' offices behind closed doors. It happens every time a product, meal, or coffee is sold. Why? Because Italian stores and restaurants have a book of "fiscal receipts" issued by the government—and legally, they need to give the customer a fiscal receipt (ricevuta fiscale) for each interaction. Each time they use a ricevuta fiscale, the government knows about the purchase… and the interaction is taxed.
Without issuing that ricevuta fiscale, it's like the interaction never happened. And, therefore, it's untaxed.
And so, guess what: You hardly ever see fiscal receipts in Italy. Especially if you're a tourist.
Restaurants and stores know that tourists have no idea what a fiscal receipt looks like versus a non-fiscal receipt. They also know that tourists have a tendency to think it's "cute" when their waiter does something like, say, scribble the total on the tablecloth or a napkin. Guess what? That's not a fiscal receipt. And that's not cute. It means that your meal isn't being taxed. It's going right into the owner's pockets, tax-free.
This has been a huge issue for, well, ages. It's something everyone knows, but—until recently—that nobody publicizes. It's part of a system that many Italians mistakenly believe benefits everyone: After all, it obviously helps owners, in the short term, especially since taxes are so high in Italy. And as a customer? If you're a regular, you know that, if you don't ask for a fiscal receipt, your local restaurant or drycleaner or whatever will give you a discount. Everybody wins.
Except, of course, that they don't.
In 2009 alone, Italians evaded about 120 billion euros in taxes—that's almost four times the value of Monti's new austerity budget. If Italy were as strict in collecting taxes as the U.K. and the U.S. over the last 40 years, economists have calculated, then the country's national debt would be 80 percent of GDP, not 120 percent.
Doesn't the government know about this, you ask? Aren't they doing anything? Well, sure. There's something called the Guardia di Finanza in Italy—think the IRS with guns—whose sole job is to make sure that fiscal interactions are done legally. Occasionally, they'll get a tip on a restaurant or shop. The problem? Because Italy is what it is, the establishment usually gets a tip-off that they're coming. And so, surprise! When the Guardia check the receipts they're issuing, they're suddenly fiscal.
With Monti's new government, though, things seem to be improving. There have just been several big stings that have shown just how bad tax evasion was—and not just in the much-maligned south, but in the supposedly-so-civilized north, too. In December, 80 tax inspectors swooped in on the tony ski town of Cortina d'Ampezzo in Italy's Dolomites. In the wake of the inspection, declared profits were suddenly up 400 percent from the previous season (gee whiz, how'd that happen?). In mid-January in Rome, an inspection of 292 businesses in one day found that 52% were in violation. And last weekend, the Guardia di Finanza targeted Milan. In the days after their blitz, reported income went up by 44 percent.
So. Well and good. But government can only do so much.
Consumers have to help, too.
Italians have started calling for boycotts among establishments that aren't issuing fiscal receipts. One of the leaders of the pack is Rome's own Puntarella Rossa, who has launched the campaign "No scontrino, no party" (no receipt, no party), encouraging diners to ask for fiscal receipts every time they eat—or to boycott the restaurant. Even more effectively, the restaurants in violation are being named and shamed. Citizens took the campaign seriously this week in Bari, for example, sending photos of the receipts they received, with the restaurants' names, to both the Guardia and to La Repubblica's blog on Bari.
It's a fantastic idea, and one that needs to spread. But it can be expanded to tourists, too. Because, with as many non-Italian diners and customers as there are in Rome and the rest of Italy, everyone needs to be a part of this for it to succeed.
So, folks: When you're dining in Italy, always ask for a "ricevuta fiscale." Don't accept hand-scribbled scraps of paper as receipts, and don't accept a receipt that says, at the top, "NON FISCALE" (not fiscal). Unless, that is, you don't mind supporting Italy's tax evasion—and the huge issues it's causing for not only Italy's economy, but the worldwide economy, too.
You could even take it a step further: Snap a photo of the illegal receipt and email it, with the restaurant's name, to puntarellarossa@hotmail.it.
Need help figuring out what is and what isn't a fiscal receipt? Check out Walks of Italy's blog post on how not to get ripped off at Italian restaurants, which includes a helpful section, with photos, on what fiscal and non-fiscal receipts look like.
10 comments
Ciao! I just stumbled upon your blog from a recommendation of a reader. Very impressed, and I loved the first post I read (this one). It warms my heart to see Italians taking tax evasion seriously, and I love a good boycott! I hope that the movement grows. I was amazed to read in the Italian papers some of the politicians that were denouncing the Cortina raids. Shame on them!
I’m going to keep reading. Thanks for the greaet post!
Hi Keith,
Thanks so much! The more support we can get for this movement, the better 🙂 Spread the word! And thanks again for stopping by!
I support my local small business people … not the government who is helping to put them out of business. Anything I can do to help them survive, I will do. How about cutting some of the ridiculous entitlements we have here in Italy? How about reorganizing the entire representational structure of the government? We have 5 times the number per capita than the US does!
Hi Dario,
Cutting entitlements and reforming the government should be—and, from what I understand, ARE being—addressed as part of solving Italy’s economic crisis, too.
But people not paying taxes is a big part of why Italy’s in the situation it is now. Again: In 2009 alone, Italians evaded about 120 billion euros in taxes—that’s almost four times the value of Monti’s new austerity budget. If Italy were as strict in collecting taxes as the U.K. and the U.S. over the last 40 years, economists have calculated, then the country’s national debt would be 80 percent of GDP, not 120 percent.
I’m sure if, if all Italians paid the taxes they were supposed to, the overall tax rate would (and could) be lower.
Moreover, there is a tendency in Italy to think that Italian taxes are higher than they are anywhere else. That is simply not the case. Italy’s corporate tax rate is roughly 32%. In the U.S., the corporate tax rate is up to 38% from the federal government and another 12% from the state government. Other countries with corporate tax rates HIGHER than Italy include India, Brazil, Japan, Malta, Argentina, France, and Colombia.
Why not help the small businesses that are being honest and doing what they’re supposed to do to help make Italy proud of its economy again—not those whose dishonesty is helping to cause the economic crisis?
Ciao Amanda,
We’ve only been living here for 5 months, and trying to decipher the Italian way of life. Thanks for a great post. I don’t think I have ever thought about the implications of these sorts of things as a whole. Will keep a look out from now on for dodgy dealings!!
Jenni
Hi Jenni,
I’m glad to help! Where in Italy are you living? How do you like it so far?
Thanks for stopping by!
Hello Amanda,
I think this is a fun and informative blog to read, but this article is really sickening. Snitching on hard working, family owned, restaurant businesses.. Come on!
Do you really think that will help anyone? You drive the owners into bankruptcy, the customers lose their nice restaurants and for the government budget it hardly matters. What would help is if Mario Monti and his Goldman Sachs and Bilderberg friends would pay their taxes. That means a lot more money than a few tax receipts from a pasta alla carbonara.
Perhaps this article was written out of some sort of misguided civic sense or naivety, and now you think differently. I wonder if you are still supporting this snitching now that Conte and Salvini are in power?
Good luck with (the rest of) your blog!
Sjoerd
Hi Sjoerd,
Thanks for sharing your opinion. I agree that one person asking for a fiscal receipt changes nothing. But the campaign I was writing about here — which, as you note, was six years ago — was part of a specific boycott led by Italian food writers and food lovers. While no one likes the idea of a family-run business being punished, the idea of a boycott is always to hold people accountable in order to create bigger change — and it’s a bit naive to think these restaurants are always run by otherwise-honest families (I’d suggest reading up some of Roberto Saviano’s work if you believe that the “black economy” harms no one and is mainly made up of hard-working families). There are many restauranteurs and business owners in Italy who respect the law and pay their taxes, and while of course it’s terrible and leads to cynicism when that doesn’t include a country’s leaders, I find it hard to argue with the overall idea of a campaign led by locals that seeks to encourage businesses to operate with fiscal transparency.
Thanks again for stopping by.
Of course I know that the black economy does not consist only of small entrepreneurs. That is exactly my point. This boycott was aimed at the wrong people. Begin at the top. Boycott the big companies, the banks, the pharmaceuticals, politicians. Or Starbucks.
There is no point in having people fight each other to get a few extra euros in tax if nothing good is done with that tax. The result will be negative for all. Better try to fight the bureaucracy, unnecessary regulations and the corruption in the government. So that maybe in the future that extra money in taxes will payed for something useful. And then we will all ask for fiscal receipts like there is no tomorrow!
P.S. Do all the food lovers and writers declare all of their income?
I think this is great. I have just had a meal in Venice and I feel SO CHEATED!!!!
Fee upon fee upon fee over €30 in coperto, service charges and tax on a receipt that is Non Fiscale.
Shame on this restaurant. I have emailed you the details.