Government sees tax windfall of 8.9%

Portugal’s tax authorities had a good result to July this year with a budgetary surplus of 8.9%.

Finanças registered a “good performance” to July, with +11.6% (Social Security contributions) and +13.1% (IRS) while the adjusted balance for the Public Administrations saw a surplus of €2.1Bn to July compared to a surplus of €1.8Bn in June. Overall, tax revenues rose by +8.9%. Corporation tax revenues rose by +16.4%.
In terms of the public accounts there was an improvement of €1.546Bn like-for-like according to the Ministry of Finances which is headed by Finance minister, Fernando Medina with an increase in effective revenues of +8.6% thanks to the resilience of the labour market.
The tax authorities highlight an increase in IRS of +13.1% to June which has led the leader of Portugal’s opposition PSD party, Luís Montenegro to call for a €1.2Bn tax break on IRS for Portuguese families this year by cutting taxes.
The government has also coined it in regarding VAT (+8.1%), although the tax authorities say that there was a cooling in revenues compared to previous months since to June VAT had grown 9%.
On the other hand, effective expenditure went up by 5.9%, an increase influenced by “rental support measures announced by the government at the start of the year and social welfare payments, as well as a reflection of inflation and its effects on public contracts”.