From a country of only 10.5 million people, Portugal’s government managed to extract more than €42 billion in taxes last year, nearly €2 billion more than in 2016.
According to figures published by the Directorate General of the Budget (DGO), direct taxes such as income tax and the tax on company profits, totalled €18.33 billion, up half a billion on 2016.
The directorate, led by Manuela Proença, reported that the increase in direct taxes is mainly due to the more companies paying more tax, just as well as the income tax take was unchanged at €12.2 billion.
The council tax ‘additional contribution’ raised an extra €129 million in its first year but the reticence of the energy sector to pay their ‘extraordinary contribution’ taxes and a lower contribution from the banking sector had to be made up from somewhere.
The answer has been indirect taxes where the State raised 23.85 billion, €1.35 billion more than in 2016.
This 6% increase was explained by the increase in VAT revenue to 15.97 billion (€894 million more than in 2016).
Tax on booze and the new ‘sugar tax’ on sweetened drinks grew 44.2% but Portugal’s smokers were a big disappointment with tax revenue down €70 million. No worries for the Finance Minister as the money kept rolling in from taxes on fuel, €3.36 billion and tax on new vehicle sales.
