Before revision:  We use our method to estimate the Italian VAT Gap related to individual firms based on information gathered from administrative sources. Our algorithm estimates the potential VAT turnover of Italian individual firms for the fiscal year 2011 and suggests that the tax gap is about 30\% of the total potential tax base.
After revision:  We use our method to estimate the Italian Value-added tax (VAT) gap on individual firms on the basis of fiscal and administrative data income tax returns gathered from Tax Administration Data Base, for the fiscal year 2011 and suggests that the tax gap is about 30\% of the total potential tax base.