Italian tax report shows top 19% of earners pay 65% of all personal income tax

Tax concentration at the top

Data from the annual fiscal revenue observatory by Itinerari Previdenziali, presented at the National Council for Economics and Labour (CNEL) in Rome with managers confederation CIDA, shows a sharp divide in Italy's personal income tax (Irpef) base. Out of 58 million residents, 42,837,963 filed tax returns for 2024, and 34,105,072 paid at least one euro in tax. Approximately 24.8 million residents paid zero Irpef. Within the filing population, 18.78% of taxpayers, or just under 8 million people reporting gross annual earnings above 35,000 euros, generated 65% of the 216.24 billion euros collected in total Irpef and local surcharges.

Breakdown of the lower income brackets

At the base of the income pyramid, taxpayers declaring up to 20,000 euros represent 47% of all filers (nearly 20.2 million individuals) but contribute only 5% of total Irpef revenue. Those earning up to 7,500 euros, numbering 7,968,832 people, paid an average of 19 euros per year, while 7,426,239 individuals earning between 7,500 and 15,000 euros paid an average of 204 euros. Taxpayers reporting between 15,000 and 20,000 euros paid an average of 1,773 euros, below the national average per capita healthcare expenditure of 2,347 euros. Combined, the 69.78% of taxpayers earning under 29,000 euros paid 21.33% of the tax, roughly 46 billion euros.

High earners and progressive taxation

In contrast, the upper tiers of taxpayers account for the bulk of public revenue. A group of 745,615 people declaring over 100,000 euros (1.75% of filers) paid 22.25% of total Irpef. At the highest level, 58,700 taxpayers earning more than 300,000 euros (0.1% of the population) contributed 14.03 billion euros, or 6.49% of the total, exceeding the 10.84 billion euros paid collectively by all 27.8 million residents earning under 20,000 euros. Alberto Brambilla, president of Itinerari Previdenziali, addressed the compounding nature of the Italian tax framework during the presentation.

The third, instead, is a progressivity that could almost be called hidden, because it is never pointed out by advocates of tax cuts, who rarely consider that as income increases, deductions, bonuses, and relief decrease until they disappear entirely, thus implicitly incentivising under-declaration.

Welfare costs and direct tax revenues

Total gross declared income in Italy grew by 4.73% in 2024 to 1,076 billion euros, outpacing nominal GDP growth of 2.85%. Direct taxes, including Irpef, corporate tax (Ires), and regional production tax (Irap), yielded 325.27 billion euros in 2024. All of that revenue, along with 7 billion euros from indirect taxes, was required to fund 138.33 billion euros in healthcare, 180.5 billion euros in social assistance, and 13.5 billion euros in local government welfare. Stefano Cuzzilla, president of CIDA, addressed the imbalance.

Today less than 19% of taxpayers support almost two thirds of all Irpef on their own.

Employment categories and policy debates

Among dependent employees, 61.4% earn up to 26,000 euros and pay 12.64% of the category's Irpef, while the 16.46% earning over 35,000 euros pay 63.14%. Among pensioners, the 16.4% declaring more than 35,000 euros cover 49.7% of the total. Self-employed workers contributed 25.64 billion euros (11.86% of total Irpef), with 36.89% earning over 35,000 euros generating 88.88% of the sector's payment. To address the distribution, CIDA proposed a unified assistance database, revised welfare criteria, and an updated ISEE index, while the Italian government considers lowering the tax rate from 43% to 33% for brackets between 50,000 and 60,000 euros.