Taxation policy: (Tax evasion and excise taxes)
The taxation is Italy is handled by the Agenzia Delle Entrate, which translates to Italian Inland Revenue. Italian taxation is fairly high as it accounts for 43.3% of the GDP. However, the taxes are put to good use and can be seen in the great quality of the goods and services that are provided by the government. The income tax and added tax are the two main sources of tax for the italian government and they account for 34.9% and 35.7% of the total tax revenue respectively. Local governments levy the other indirect taxes for their use. There is one glaring problem that Italy is facing which includes tax; tax evasion. Citizens try their best to avoid the high income taxes placed on them by falsely reporting earnings. The tricky tax policy which allows public and private employees have lower tax than employers makes tempting to follow this route. However, Italy is on their way trying to fix this problem. Excise tax is practiced in Italy to lower demand for harmful things such as cigarettes. For example, 58.7% of the prices of cigarette packs is solely tax. There are also excise taxes on tobacco, alcohol, and various energy sources.