State raked in €2 billion more in taxes last year

A 4.9% increase in Portugal’s tax revenue outstripped the 4.5% growth in State spending last year, mainly due to increased income tax and corporation tax revenues which registered a year-on-year rise of 7.7% as at the end of 2018.

The state raised €44.3 billion in taxes in 2018, an increase of €2.09 billion over 2017, according to a budget analysis released by the Directorate General for the Budget.

Corporation tax shot up by 10.2% to €6,339.2 million for the year.

As for income tax, 2018 closed with revenue of €12.91 billion, reflecting a year-on-year increase of €680.3 million even though the rates have gone down for many wage earners.

As regards indirect taxes, there was an increase of 2.8%, “mainly due to VAT,” notes the Directorate, adding that “all other indirect taxes increased revenues, with the exception of the Tobacco Tax and the ISP tax on fuel, that suffered slight reductions.”

The Ministry of Finance said that the, “positive evolution” of tax revenue “reflects the good momentum of the Portuguese economy,” as the income tax rate has been reduced and the principal tax rates have remained unaltered.”