Figures released by Italian statistics agency Istat on Tuesday showed the size of the country's “non-observed economy” - activities that are underground, illegal or informal – in 2017, saying around 19 billion of this was linked to illegal activity.
But it said the figures for 2017, which are the latest available, show that the shadow economy is in fact continuing to shrink.
In recent years the fgure has been getting gradually smaller after it peaked at 13 percent in 2014. ISTAT pointed out.
However, the figures also showed that the number of people working “off the books” in Italy in 2017 amounted to 3.7 million, some 25,000 more than in 2016.
The figures were released as ministers in Italy's coalition government continue to argue this week over policy proposals to be included in its new draft 2020 budget, which is set to focus on tackling tax evasion and undeclared work.
Ministers have proposed everything from tougher prison sentences for tax evasion to a possible new tax on cash withdrawals, which it hopes could push more italians to stop using cash for the majority of transactions.