State needs urgent reforms – now!

The President of the association Business Roundtable Portugal (BRP) has praised the government for being on the right track in tackling bureaucracy, but has signaled that it must “hurry up and do it”.

Carlos Moreira da Silva told Journal Económico that the creation of a Ministry of State Reform was “a beacon of hope”.

“We already had various ministries for modernisation, but not in this form, and it seems its ambition is much broader so there seems to be a political will to change the relationship between the State and its citizens”.

“It poses the question that this is a very important change, and before and after changes to regulations will make us change a lot of ideas in our heads, and affect all of us, but we need to press the prime minister of the urgency to make these changes in tackling red tape,” he said.

And added: “In addition to good intentions, there needs to be a change in the State. It is not enough to legislate and regulate. It is necessary to monitor what happens after this legislation, to see if it is effective or not. This practice doesn’t exist in the government, it doesn’t exist in the State. The State legislates, but it does not follow up”.
As for the government’s tax reduction measures, he said that slashing tax by €500 million was “very important” but will be far from having the transformative effect that measures we have suggested would have.”

“We have more than 20% of the population on a minimum wage and we can’t continue on like that. It’s not reasonable. Naturally, there are less qualified jobs, but they should be few – 3% or 4%. You can’t have more than 20%.”

“Our proposal was to make a transformative change, with the reduction of the levels at the bottom of the pyramid; the first five levels. This was our proposal. It had a slightly higher cost than this, but with a much higher impact on the economy and without significantly affecting the State’s net revenues. So, the IRS is going in the right direction, but I think it’s not enough”, said the BRT president.

And as for cuts in IRC tax, the BRT agrees that making tax cuts for both employees and companies is the right course of action, as well as making the State more efficient.

“One of our arguments is that the IRC tax, while progressive, is not fair and penalises success and that there should be a much broader reduction in IRC, and I would like to see progressive taxes eliminated across the entire spectrum”, says Carlos Moreira da Silva.

The standard corporate income tax rate has been lowered from 21% to 20%, with the government aiming to reduce it further to 15% by 2027.