On the same day that the inflation slowdown was confirmed for the fifth consecutive month, the National Institute of Statistics (INE) announced that the tax burden in 2022 increased by 14.9% in nominal terms to EUR 87.1 billion. This means that the tax burden represents 36.4% of the national gross domestic product (GDP).
“Considering 2021, the last year in which information is available for the European Union (EU 27) and excluding taxes received by the institutions of the European Union, Portugal continued to present a tax burden (35.1%) below the average of the EU 27 (40.5%),” emphasizes INE. That is, the figures calculated for 2022 represent a new record, since in 2021 the weight of taxes and contributions in GDP was 35.3%.
The National Bureau of Statistics says that direct tax revenue alone increased by 24.1% in 2022, “primarily due to the evolution of the Personal Income Tax (IRS), which grew by 12.8% “. This evolution represents an increase of 1.925 billion euros compared to 2021.
On the corporate side, corporate income tax (IRC) revenues increased by 59.6%, “benefiting from the more favorable behavior of the Portuguese economy in 2022” in 2021, even exceeding the values recorded in the pre-pandemic period of time.
Indirect taxes increased by 12.2%. The weight of VAT alone increased by 18.1% and the relevance of municipal tax on loss-making transfers of real estate to the indirect tax pie increased by 26.3%. In the past year, VAT represented 61.5% of indirect tax revenues (58.4% in 2021). VAT revenue amounted to 22.6 billion euros, 3.452 billion euros more than last year.
INE justifies the evolution of VAT with the performance of the national economy in 2022, but also with the “significant increase in the price level”.
“In fact, there was an increase in private consumption by resident households, which nominally exceeded 12.6% in 2022, and in final consumption by non-residents in the economic area (tourism exports), which registered a significant positive variation of 109.7%, with nominal values about 15% higher than the pre-pandemic period,” adds INE.
On the other hand, effective social contributions increased by 10.2%, due in particular to the growth of paid work, salary updates and the increase in the minimum wage.
INE also indicates that the tax on oil and energy products was the only one of the main taxes with revenues falling (-21.3%, or €757 million), “as a result of the measures taken by the government to address rising fuel prices”.
In 2021, Portugal was the ninth EU country with the lowest tax burden, with lower tax revenues than, for example, Spain, Greece and Italy.
José Varela Rodrigues is a journalist for Dinheiro Vivo
Source: DN
