The president of the Portuguese Business Confederation (CIP), António Saraiva, said on Tuesday he believes there will be a pleasant surprise in the drop in the IRC rate from the current 21% to 19%.
“I am convinced that we will be pleasantly surprised when we present the budget soon” [do Estado] with this possible reduction of the IRC’s nominal rate from 21% to 19% and transversally”said António Saraiva at the “Tax in OE2022” conference promoted by the Global Media Group, in Lisbon.
Speaking on a panel whose overall theme is “The tax shock is key. How can the tax approach in OE2023 help families and businesses”stressed that Portugal “scores poorly” with other countries in the area of corporate tax (tax on corporate profits), and therefore “more important than the rate [passar de 21% para 19%] is the signal that is given”Because there is “a reputation effect” with the decline in the nominal IRC rate.
The president of the CIP referred to the fact that this confederation is discussing the agreement on competitiveness and income in the context of the social dialogue, insisting on the need for stability and a “gradual and segmented” reduction in the tax burden, but stated that it will not depend on the agreement to lower the IRC rate.
“The agreement on social dialogue should have the name, it should be a competition and income agreement, as we have defended, competitiveness to improve competitive factors and thus improve income sustainably and it is in this perspective that we have discussed a range of measures that not only reduce the tax burden, but also a range of other aspects such as bureaucracy”said Antonio Saraiva.
“For this reason, we have been pushing for a gradual and segmented cut and for the nominal rate in the IRC to be changed from 21% to 19% and cut again in the following year, subject to conditions.”said, but needed: “we don’t let the agreement depend” of the IRC descent.
This Sunday, Economy Minister António Costa Silva said a corporate tax cut for all companies would be “an extremely important signal for the entire sector” and “extremely beneficial” in light of the current crisis.
“Today, given the crisis we have, I think it would be extremely beneficial to have this transversal reduction and see from there what impact it could have in the future”the official said in statements to journalists on the sidelines of a visit to Portuguese companies participating in the MICAM shoe fair in Milan, Italy until this Tuesday.
“I hope that in the negotiations on the Income and Competitiveness Agreement and, later, in the state budget, we can have this goal of reducing the IRC”he added.
Although the government program foresees a selective cut of the IRC, targeting companies that reinvest part of their profits in economic activity, invest in technological innovation or hire qualified young people, Costa Silva guarantees that he has always been “very clear” that the country, somewhere, I had to do this transversal reduction of the IRC”.
Commenting on what the Secretary of State for Taxation, António Mendonça Mendes, said during the opening session of this conference – that a fiscal shock is not a panacea for solving problems and that he valued PRR funds for companies to make progress in the energy sector transition – the president of CIP said the transition will take time and businesses are now facing significant increases in energy bills.
Previously, former Secretary of State for Taxation Carlos Lobo championed a simplification of the tax system and recalled the taxation of snap profits (known as ‘unexpected gains’) that energy companies are already subject to an extraordinary contribution (the CESE), which, despite being extraordinary is, it remains, as it happened, he said, with the stamp duty, which was also considered extraordinary and never ended.
Source: DN
