The Treasury is massively underestimating the amount of money it is failing to collect in taxes, according to the civil service union.
HM Revenue and Customs (HMRC) has said £35 billion is lost through tax evasion, avoidance and not being collected. But the Public and Commercial Services union has said the tax gap is in fact £120 billion a year.
PCS general secretary Mark Serwotka said: "By any measure, £35 billion is a lot of money and it ought to be chased. But we estimate the real figure is more than three times that, and cuts in HMRC are leaving the department unable to cope.
"Instead of cutting jobs and offices, ministers should invest to rigorously pursue the tens of billions of pounds in tax lost through the use of tax havens and evasion and avoidance tactics by big corporations and the very wealthy."
Exchequer secretary, David Gauke, said while HMRC was making progress in reducing the tax gap, there was "no room for complacency".
“Just in the last few weeks we have challenged off shore tax evaders, closed tax avoidance loopholes and created a new HMRC unit to ensure that the wealthier members of society pay their way," he said.
The Treasury recently announced plans to target the the 350,000 people in the UK whose personal wealth is more than £2.5 million through a new "affluence" team.
But HMRC stood by its £35m figure and said of the PCS claim: "We have the taxpayer information, they don't".
The PRC has called on the Treasury to share details of the model it uses to estimate its figures in order to independently verify them.