Portuguese taxpayers bail out the government

taxThe tax burden on individuals was so high last year that it more than offset the cost of righting the government’s mistake over Christmas and holiday bonuses.

The austerity measures last year led to a deficit of 4.9% of Gross Domestic Product which is 1% lower than the target set by the Troika.

This was primarily due to higher receipts in taxation, particularly from struggling families and individuals, according to Correio da Manhã.

The total removed from citizens’ pockets was an astounding €41 billion in a country of just 10.5 million people, not all of them taxpayers.

The Bank of Portugal’s April newsletter noted with a rare note of astonishment that the taxes paid by households rose by 36.9% in 2013 over the previous one and that the revenue collected more than offset the expense of repaying the Christmas and holiday bonuses snatched from civil servants and pensioners, as a result of the Constitutional Court decreeing that the action had been illegal.

In last year’s State Budget the government imposed wide-ranging changes to the tax system and introduced a 3.5% surcharge for any income above the minimum wage of just over €450 a month.

The failed Finance Minster Vítor Gaspar said at the time that the Portuguese would be the target of "a massive tax increase," for once he was right.

Gaspar is now the Director of Budgetary Affairs at the International Monetary Fund on an inflation-busting €23,000 a month, tax free.

Pin It

You must be a registered user to make comments.
Please register here to post your comments.