Tax authorities get tough on debtors

The Portuguese tax authorities are getting tougher on outstanding taxes raking in an extra €1.06Bn in unpaid taxes, up 26% on 2017.

This is according to data from the State’s provisional accounts published on 11 February by the Directorate-General for the Budget (DGO).

The business daily Negócios reported on Friday that this tax clawback was the best result since 2010, excluding the years in which this charge was increased because of tax amnesties.

The amount of enforced recovery could even increase when added to enforced payment of outstanding national insurance contributions charged by Social Security.

In 2017 State tax receipts grew 4.9%, while receipts from direct taxes grew 70% between 2017-2018 from €340 million from enforced recovery to €578 million in 2018. This amount represented 2.9% of the total net revenues from direct taxes.

The increase is also explained by the fact that 2016 was a tax amnesty year and that the following year (2017) saw a sharp fall in enforced recovery. At the time the tax authorities justified that it had registered an extraordinary windfall of €55 million in 2016 through the PRERES (Special Plan for State Debt Reduction.