Parliament today approved a law that obliges banks to tell the tax man which of their customers have a balance of €50,000 or more.
The legislation obliges banks to report this private information to the Tax and Customs Authority by July 31, relating to balances held at the previous year-end.
Two years ago, the President of the Republic, Marcelo Rebelo de Sousa, vetoed a similar move to strip another layer of privacy from Portugal’s public that will increase the amount of cash held by its citizens.
Last May, the Minister of Finance clarified that the Tax Authority will have access to the balance but not to the movements within the accounts.
Mário Centeno said that, although the tax authorities access information on accounts starting at €50,000, there will be no “exchange of information with third parties, national or foreign, private or public.”
Few believe the minister’s assurance. Governments, when they collect such data, have a poor record in keeping it for the intended purpose.
Centeno considered the measure, “extremely important for the fight against fraud and tax evasion” by providing an “additional element to the Tax Authority to determine if there are indications of illegal tax practices for certain taxpayers.”
“The data serve as a disincentive to concealment and will have an important preventive role,” claimed the Finance Minister, seemingly unaware that those up to no good are adept at concealing the fact.
The legislation has been kicking around for eight months, but will apply from this year-end, giving people ample time to make the necessary arrangements to reduce their balances should they not wish to end up, on what one expatriate called, “a dangerous list as the taxman has nasty habit of freezing accounts when it feels so inclined.”