Italian state revenue on the rise: the role of gaming in the first nine months of 2025
Between January and September 2025, Italy’s Ministry of Economy and Finance recorded an overall expansion in tax and social contribution revenues. Total receipts increased by €26.661 billion compared to the same period in 2024, marking a 4.2 per cent rise that confirms the resilience of the country’s fiscal machinery amid an evolving economic landscape. Growth came from both tax revenue, up by €8.056 billion (+1.9 per cent), and social contributions, which saw a more pronounced increase of €18.605 billion (+9.4 per cent), reflecting employment trends and legislative changes introduced over the past year.
Direct taxes slow down, but substitute taxes deliver momentum
Tax revenues assessed on a legal competence basis reached €426.951 billion in the first nine months, an increase of €8.396 billion (+2.0 per cent). Direct taxes amounted to €241.969 billion, recording modest growth of 0.3 per cent. The main drag came from personal income tax (IRPEF), which fell to €170.802 billion, down by €3.645 billion (-2.1 per cent). The decline stems from the reduction in withholding taxes on employment income, which dropped by €2.108 billion (-1.3 per cent), reflecting the impact of the 2025 Budget Law.
The legislation made permanent the reduction of the tax wedge that had initially been introduced as a temporary measure for 2024. Last year, the cut in social security contributions had mainly affected social contribution revenues while only indirectly influencing tax receipts. In 2025, the structural nature of the measure reshapes the balance more clearly, with a tangible effect on IRPEF flows. A further negative factor is the fall in IRPEF self-assessment payments, which declined by €1.814 billion (-13.6 per cent). Corporate income tax (IRES) also fell, reaching €31.667 billion, a decrease of €944 million (-2.9 per cent).
However, substitute taxes on income and financial returns moved in the opposite direction. Revenue from taxes on investment income, interest, and capital gains rose significantly, reaching €1.772 billion (+12.9 per cent), €1.629 billion and €1.238 billion respectively for pension fund taxation. This positive trend stems from the robust performance of Italy’s managed savings sector in 2024, which saw growth in active positions and particularly strong investment returns.
Indirect taxes increase: VAT drives the surge
On the indirect taxation side, the Treasury collected €184.982 billion, an increase of €7.589 billion (+4.3 per cent). Value Added Tax (VAT) once again acted as the primary driver, rising to €127.229 billion, up by €3.521 billion (+2.8 per cent). Domestic VAT accounted for €113.210 billion (+3.0 per cent), while VAT on imports totalled €14.019 billion, marking a still positive rise of 1.8 per cent.
Additional support came from excise duties on energy products, which increased by €304 million (+1.7 per cent), mirroring consumption trends and adjustments in fuel prices across the year.
Gaming and lotteries: revenue up but collections down
Within the gaming and lottery sector – a key segment for the entertainment and betting industry – the figures for the first nine months of 2025 reveal a mixed performance. Tax revenue from gaming activities reached €4.906 billion, an increase of €33 million (+0.7 per cent) compared to the same period in 2024. This result confirms the sector’s stability from a fiscal perspective, with consistent demand and a steady contribution to state finances.
Collections, however, told a different story. Actual amounts received fell by 1.3 per cent, totalling €4.823 billion – €65 million less than in 2024. This discrepancy suggests shifts in payment timing or collection processes, rather than a genuine decline in public engagement with gaming.
A budget in transition: policy shifts and economic trends reshape the outlook
As Italy moves into the final quarter of 2025, total revenue continues to grow, supported by policy measures and an uneven yet ongoing economic recovery that helps sustain the country’s public finances.
This article was first published in Italian on 18 November 2025.
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