Fewer taxes, lower administrative and context costs, incentives for capitalization and the creation of an exceptional regime for the transfer of tax losses from 2022 to previous years are some of the demands of companies in the State Budget for 2023. But not only. Faced with the crisis, which threatens to worsen, with the rise in inflation in Europe, business people are demanding a reorientation of the Recovery and Resilience Plan (PRR) and the unexecuted part of the PT 2020, as well as an acceleration of the commissioning of Portugal 2030.
“The current situation further justifies a strategy to stimulate the economy and recovery that should not be limited to using European funds, let alone transferring costs from the state budget to these funds. The priority is to strengthen the competitiveness of companies, based on productivity gains”, defends the president of CIP – Confederação Empresarial de Portugal.
António Saraiva, who will be one of the speakers at the annual conference of Dinheiro Vivo, taking place on the 20th, at the Cultural Center of Belém, under the theme “Covid, war, inflation: how to adjust taxes in the OE2023” , is compelling in his analysis: “In the area of taxation, it is necessary to reverse the trend towards an increase in the tax burden on the economy and to correct the aspects in which the Portuguese tax system is more unfavorable, making it more competitive, predictable and simple and therefore more favorable for attracting domestic and foreign investment”.
But not alone. The CIP believes there is a need to boost corporate capitalization as financing difficulties “continue to be a serious barrier” to investment and technological innovation, “holding back the necessary structural change in the economy”. António Saraiva says the banking system has “failed” to channel financial resources into the productive sector, so “promoting an effort aimed at strengthening financial structures and recapitalizing economic viable businesses”.
In fiscal terms, and according to the proposals submitted to the government by the National Council of Employers’ Federations, the “first priority” is the reduction of corporate income tax, including the “resumption of the commitment to abolish” the surcharges and the reversal of the autonomous tax increases introduced in 2014.
The companies also plan to “deepen” the system of deduction of retained and reinvested profits, increasing the possibility of deductions from the collection to 50% of the retained earnings that are reinvested, eliminating the absolute maximum investment limit and the system will be extended to all companies . Under the IRS, entrepreneurs want an exemption for overtime, with a limit of a maximum of 200 hours per year. As for VAT, the CIP recognizes the “need for some caution”, but believes that it would “make perfect sense” to lower it on electricity, natural gas and fuels.
As for how all this should be carried on, António Saraiva has no doubts that “the sustainability of public finances is compatible with tax cuts”, stressing that the tax cuts would be offset “by the increase in revenues resulting from of the increase in economic activity.” To ensure the sustainability of public finances, it is necessary to keep current public expenditure in a global approach.
In addition, the leadership of the Portuguese associative movement also demands the inclusion, in the next OE, of measures such as deepening support to the companies most affected by the crisis, “in line with the programs implemented in other European countries of to prevent companies’ companies from being placed at a disadvantage in competition in global markets” or the introduction of an exceptional scheme for carrying forward tax losses from 2022 to previous years. It also wants to apply automatic and irreversible default interest on public entities that exceed the payment term of 60 days. The reduction of the tax on electric cars and the creation of a support line for the installation of solar panels in companies are other claims.
The president of Associação Empresarial de Portugal believes that “the best response the government can give to the current crisis is to mitigate as much as possible the increase in operating costs, with a relevant action with fiscal resources, which is already high in the European context even before the pandemic and the war”. Mainly because, with the rise in inflation, Luís Miguel Ribeiro argues, “tax revenues are now growing well above the government’s forecast in terms of the state budget, which generates a significant budget surplus to be used to support the economy, namely through the tax cut for businesses and families”.
Not related to the OE, but equally important is the reorientation of the PRR and the unimplemented part of the PT 2020 “to respond to the most urgent needs of the country”, and “accelerate the entry into force of Portugal 2030 “. In addition, “it should be ensured that Banco Português de Fomento can play an important role in co-financing business investments that are not covered by the incentive schemes”, he says.
Ilídia Pinto is a journalist for Dinheiro Vivo
Source: DN
