Portugal’s taxes above OECD average

 In Economy, News, Tax

The Organisation for Economic Cooperation and Development (OECD) estimates that the tax burden in Portugal stands at 34.8%, the same rate as in 2018 when it reached a historic maximum.

The latest figures for 2019 are in line with estimates from the country’s National Statistics Institute (INE).
The average tax burden within the OECD, according to its report published on Thursday, went down 0.1% to 33.9%.
In the case of the OECD countries, the ratio has stabilised slightly above the 33.3% registered in 2000.
Portugal’s tax burden was slightly below the OECD average until the sovereign debt crisis between 2009 and 2014, but has been above average ever since.
In recent years, the tax burden increased gradually in Portugal as the economy and job market recovered from 2015 onwards, not translating into a significant across-the-board increases in taxes, but rather via social security contributions.
Normally, this indicator tends to fall in crises because tax revenues fall more than GDP, which is on the cards for 2020 and 2021.
In 2019, Portugal was in 18th position in the tax burden ranking of the 37 countries which make up OECD, the same position it had in 2018.
The highest tax burden is seen in Denmark (46.3% of GDP), followed by France (45.4%) and Belgium (42.9%). The lowest are seen in Chile (20.7%), Colombia (19.7%) and Mexico (16.5%).
Some 15 countries lowered their tax burden in 2019, with Hungary leading the way (1.7 percentage points) followed by Island (1.1) and Belgium and Sweden (one percentage point each).
In Portugal income tax stand at 19%, property tax stands at 4%, social security (27%), VAT 25% while IRC corporation tax stands at 10%.
And according to the report, for the first time in a decade and since the financial crisis, the tax revenues of the OECD countries fell in 2019, with forecasts that tax revenues will fall even more because of the Covid-19 crisis and reduction in household consumption and economic activity in 2020.