The weight of taxes and social contributions in the economy continued to increase last year, with the tax burden to represent 34.5% of Gross Domestic Product (GDP). It is the highest value in 21 years (since at least 1995, the first year of the series of the National Institute of Statistics data. The increase compared to 34.2% in 2014 was due to the increase in revenues from indirect taxes.
the numbers of tax revenues published on Thursday by the National Statistics Institute (INE) show that the taxation level rose for the third consecutive year, always staying above 34% of GDP
in 2015, the tax burden has worsened more than the previous year and grew to more than the entire Portuguese economy as a whole (compared to the nominal growth rate of GDP). and the revenues from taxes and social contributions grew by 4.4%, after in 2014 have gone up 2.1%.
the big jump in the tax burden occurred in 2013 with the “huge increase” in taxes, where the ratio of GDP rose to 34.1%, while the previous year was at 31.8%. from there, always has been maintained above the level of 34%. in 2014, there was a slight increase, a tenth, presenting the following year an increase of three tenths.
in direct taxes, there was a decline of 1.4% in IRS revenue, while the IRC was an increase of 15.7%. Already at the level of indirect taxation, “highlights the VAT revenue performance, with an increase of 4.7% and growth of 10.4% in revenue from the tax on oil and energy products (ISP)” referred to INE. This increase happened in the year of entry into force of the reform of green taxation, which was among the most emblematic measures the carbon tax, applied in the form of an additional value in the ISP, and an increased contribution to the road sector.
the increase in ISP revenue led the tax to represent 11.7% of the charge made in indirect taxes. The increase is mainly explained by the INE precisely the “increase in rates as a result of two measures of tax burden: the increase in the contribution to the road sector and the introduction of the carbon tax envisaged in green taxation”.
in the case of fuel consumption, “developments were mixed in 2015, and rising diesel fuel consumption by 3.2%, while the consumption of LPG (propane and butane) and 8,2% of petrol consumption decreased 1.1 % “.
Portugal continues to have a lower tax burden than the European average. As Eurostat excludes taxes received from each country the institutions of the European Union, the Portuguese tax burden is, for this comparison, 34.3% (not 34.5%). The average of the 28 EU countries, the tax burden reaches 39%, with Denmark being the country where this indicator is higher, 47.5%. Portugal is positioned “substantially the middle of the table, with a higher tax burden in Spain (33.9%), but lower than in Greece (36.3%),” said the INE.
The Portuguese State raised last year almost 61,862 million euros in taxes and social contributions paid by workers and companies. Most comes from indirect taxes, a total of 26.2315 billion euros, equivalent to 42.4% of the total value. Already direct taxes (personal and corporate income) amounted to 19.4579 billion euros, representing a share of 31.5% of revenues, while social contributions surrendered to the coffers of the State 16,172,500,000 euros, ie 26.1 %.
While direct taxes (personal and corporate income) have been assuming greater importance in revenues last year its weight decreased. The same happened with social contributions, as opposed to indirect taxes. Portugal is, moreover, one of the EU countries where indirect taxes are higher than the European average (34.7%).
This year, the Government also provides that there is a decrease in direct taxes ( through the lowering of personal income tax surcharge) and an increase in indirect, where there were increases imposed.
One of the measures taken to compensate for revenue shortfalls caused by the oil price decrease, passed the worsening the tax on petrol and diesel in six cents (now spent three months is expected to announce a partial descent).
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