Tax revenues in Portugal increase more than GDP

The tax burden rose slightly again last year, representing 35.4% of the gross domestic product. This is an increase of 0.2 percentage points, revealed the National Institute of Statistics (INE) on Thursday. (March 26th).

For the year as a whole, the State collected almost €109Bn in tax revenue, an increase of approximately €6.9Bn compared to 2024. “In 2025, public administration tax revenues amounted to €108.7Bn, increasing by approximately €6.9 billion compared to 2024 (a variation of 6.7%, in nominal terms),” indicates the national statistical authority. “This evolution of tax revenues,” explains the INE, “reflected the growth of economic activity, with nominal GDP increasing by 5.9% (1.9% in volume).”

Therefore, it adds, “as the nominal growth of tax and contribution revenue (6.7%) was higher than that of GDP (5.9%), the tax burden as a percentage of GDP increased by 0.2 percentage points, to 35.4% in 2025 (35.2% in the previous year).”

Spending increased almost at the same rate as revenue, with salaries being the main driver.
Total state spending also increased above the rate of economic growth. According to the INE (National Institute of Statistics), this component “registered an increase of 6.6% between 2024 and 2025, as a result of a 5.6% growth in current expenditure and an 18.1% growth in capital expenditure.”

According to the statistics office, “employee remuneration contributed significantly to the increase in current expenditure (growth of 7.6%, an additional €2,290 million euros), reflecting the widespread updating of salaries for workers with public employment contracts, namely increases in the health, teaching staff and security forces sectors.”

In social benefits, excluding in-kind transfers, “the increase was €2,894 million, corresponding to a growth rate of 6.2%, reflecting updates to pensions under the general Social Security scheme and the Caixa Geral de Aposentações (General Pension Fund), as well as the increase in the number of pensioners and the granting of the extraordinary supplement for pensioners in September 2025.”

The INE (National Institute of Statistics) also states that the increase in expenditure in this category was due to “increases in other social benefits supported by Social Security, in particular parental benefits and the solidarity supplement for the elderly.”

Source: Negócios.