Tax revenues down in Portugal to May

Tax revenues in Portugal fell by almost €100 million in the first five months of the year.

Taxes collected to May fell by €98.3 million like-for-like on 2023, resulting in a fall in direct taxes of €291.4 million, but an increase of €193.1 million in indirect taxes. However, revenues weren’t sufficient to cover it.

Portuguese government expenditure grew and revenues fell, worsening Portugal’s public deficit by almost €2.5Bn.

It was a fall in tax revenues of around 0.5% according to data from the Directorate-General of the Budget.

From January to May, the State netted €21.151,2Bn, (down €98.3 million) and a fall of €291.4 million in direct taxes (down 3.8%) which was not compensated for by the increase of €193.1 million, or +1.4% in indirect taxes.
In the budget to April, the State basically brought in the same tax revenues as in 2023, posting an increase of only €100,000 from total tax revenues of €17.2Bn.

This fall in the sum of taxes collected was decisive for current revenues falling 3.7% to May in relation to the same period last year, which compares to the 4.5% in the budget implementation to April, while expenditure rose by 12.5%, although less than the 14.7% to April, while primary expenditure climbed 13.1%.

The DGO also informed that the budget execution was “influenced by the transfer, in 2023, of all the responsibilities assured through the Staff Pension Fund from Caixa Geral de Depósitos (FPCGD) to CGA [Caixa Geral de Aposentações], in the amount of €3.018.3Bn euros”, although this operation did not interfere with an analysis in national accounting.

On the expenditure side, there was a 13.1% increase in primary expenditure, although this included the impact of extraordinary measures. These apart, the indicator rose 11.8%. The budget implementation document explained that this was mainly due to the 12.5% increase in transfers, 8.2% in the purchase of goods and services and 7.9% in personnel expenses, reflecting salary updates in the civil service.