In line with expected inflation for next year, the government has decided to raise taxes on alcoholic and soft drinks by 4%. Only wine escaped the tax increase. As far as tobacco is concerned, the excise duty on heated cigarettes will increase by 6% next year, from €0.182 per gram to €0.193. As for the regular pack of tobacco, it is still not possible to understand the effective increase in the tax, as the specific component has increased by 10%, from 102.01 euros per thousand cigarettes to 112.5 euros, but the component ad valorem decreased from 14% to 12%.
The increase in the Tax on Alcohol, Alcoholic Drinks and Sugary Drinks (IABA) and the Tax on Tobacco (IT) will of course have consequences for a price increase for the end consumer. In this regard, Ernest & Young adviser Amílcar Nunes warns that “the increase, due to the taxation of the final price of consumer goods subject to IABA and IT, will lead to a worsening of inflation, adding the so-called “imported inflation”, included in what represents the purchase price of goods and services outside the national territory, which are already expensive or inflated, especially raw materials and energy goods,” he told Dinheiro Vivo.
Several sectors, especially soft drinks and alcoholic beverages, have already challenged the increase in the tax burden. The Portuguese Association of Non-Alcoholic Refreshing Drinks (PROBEB) points out that the IABA update “represents the continuity of a tax” that the association finds “unjust and discriminatory,” Francisco Furtado Mendonça, director-general of the association, told Dinheiro Vivo.
In the same vein, Portugal’s brewers deplore the government’s “insensitivity” to the importance of a sector “based on the national value chain, which represents 1.5% of GDP and more than 150,000 direct and indirect jobs,” emphasized Francisco Gírio , secretary general of the association. “The IABA increase of 4% means that Portuguese beers will pay almost 22 euros per hectolitre in tax, while in Spain it will remain 10 euros per hectolitre,” he shot, pointing to the “clear injustice” against other sectors that pay these special tax, such as wine, not.
On the mind side, the feeling is also one of general dissatisfaction. For the Secretary General of the National Association of Spirits Companies (ANEBE), João Vargas, “the 4% increase for the spirits category is not rational”, pointing out that in 2022 the sector had “a year of economic recovery after the pandemic”, driven by the “great dynamism” of tourism, which made it possible to deliver 36.1% more taxes to the state in August compared to the same month of 2021. In addition, he emphasized that, in the first six months of the year, the sector saw no tax increase – the 1% increase only came into effect on July 1 – demonstrating that it is possible for the state to collect more without raising excise taxes, he argued.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
