Italy has reached a tax evasion reduction goal agreed with authorities at the European Union ahead of schedule, according to a Treasury document published on Wednesday.

However, the situation was helped along by changes to Italy’s economic data.

Although associated with statistical adjustments, the forecast improvement in tax compliance will help the country gain further EU funds, Reuters reports.

As part of its post-pandemic recovery plan, funded by the EU, Italy pledged to the European Commission it would lower a key figure measuring an inclination to evade taxes to 15.8% this year from 18.6% back in 2019.

The Treasury document revealed that the indicator declined in 2021 to 15.2%.

In regard to the trend, the Treasury said the figures considered “an adjustment of an extraordinary magnitude” implemented by the national statistics bureau, ISTAT in September, which led to a rise of around €40 billion in GDP in 2021.

Up to now, Italy has received approximately €102 billion within the Recovery and Resilience Facility (RRF), the principal factor within the European Recovery Fund, out of a total national allocation of some €194.4 billion through until 2026, the Reuters report goes on to add.

According to Treasury data published by the government, the estimated amount of missed taxes and social contributions declined to nearly €83.6 billion in 2021, from €107.8 billion in 2016.

Since taking office in October 2022, Prime Minister Giorgia Meloni has urged for a cooperative approach with taxpayers to limit serious tax evasion impacting the economy, stating that more forceful policies implemented by previous governments had failed.

Nevertheless, the Treasury document shows the reduction in tax evasion is predominantly down to VAT sales tax, “presumably driven by the various measures taken to strengthen the traceability of transactions.”

Furthermore, following criticism from the European Commission, Meloni had to back down on a proposal to reduce sanctions against shopkeepers who rebuffed attempts to accept digital payments, back in December 2022.