The tax burden shouldered by Portugal’s companies and population last year was the highest in 22 years.Portugal remains below European average for the overall taxes paid to the government but taxes and social security contributions remain lower than the average in the European Union.
The Institute of National Statistical today confirmed that the tax burden rose in 2017 to the highest since 1995 when accurate records began, reaching 34.7% of GDP.
According to the statistics agency, last year "the positive change in revenue was determined by a growth in all areas of the tax burden."
The EU average is 39.3% with Ireland paying the lowest at 22.6% and Denmark paying the highest at 47.1%.
Portugal may be in 12th place among its European neighbours but it still hurts with corporation taxes up 10.2%, a 12.7% increase in vehicle tax revenue, a 4% increase in the tax on tobacco, and tax from petrol and energy products up by 2.4%.
Portugal’s property market has produced record revenues with the IMI surcharge up 8.7% and property purchase income (IMT) up by a whopping 31.6%.
On the personal side, income tax revenue remained "practically at the same level," according to the statisticians, despite the reduction in the effective IRS rate by removing the austerity surcharge.
As for social security revenue, this grew 6% due to a growth in the number of people with jobs and, to a lesser extent, the full reversal of salary cuts for State employees.
Top salaries - 'mind the gap'
Looking at the income levels of the country’s top business people, the average remuneration of the CEOs of Portugal’s PSI 20 companies in 2017 was €1 million, up 40% from 2015.
These millionaire salaries are 46 times higher than the average wage earned by those companies’ workers. In 2015, that difference was 33 times.
In 2017, EDP’s António Mexia, the highest-earning CEO on stock exchange listed companies, earned €2.29 million, 39 times more than EDP's average cost per employee.
Three years ago, he had earned €1.15 million, 23 times more than the company's employees.
On average, each "boss" of one of the PSI 20 companies earned €996,000 gross in 2017, compared to a remuneration of €708,000 three years ago.
Since 2015, the accumulated profits of the companies listed on the stock market rose 50%, to more than €3.5 billion. This improvement in profitability is one of the explanations offered the increases in the remuneration paid to managers – but clearly not to the workers.