“No VAT rise this year” said the Minister of Finance in response to a recommendation from Brussels that a 1% rise on the lower two VAT rates would help balance the nation's books this year.
After the European Commission's decision not to punish Portugal and Spain by imposing a fine, Brussels followed up with a suggestion that the 6% and 13% rates of VAT should be hiked by 1% to augument State income this year.
The Ministry of Finance has indicated that it "is not expecting any change to VAT rates in 2016," nor is it to implement "any other measures that currently are not included in the 2016 Budget."
"There has been no request for additional measures to achieve the results that the government has committed to both in the stability programme and the State Budget", stated the Minister of Finance, Mario Centeno.
Changes in VAT rates planned for 2016 already have been implemented, all in a pleasing downward direction as from July 1st, most notably the drop in restaurant VAT to its old 13% level from 23%, to the delight of the sector.
The European Commission decided on Wednesday not to apply penalties to Portugal and Spain for failure to fulfill their deficit targets and in the supporting document, presented new goals to the Portuguese government which suggested raising the lower VAT rates.
This has been rebuffed as politically suicidal but Centeno did not hint at what lies in store in 2017, nor can he as the 2017 budget has yet to be written or debated in parliament.
