Portugal’s citizens never have paid so much tax with the latest government estimate showing a record haul of €37 billion for the year.
The amended, amended, amended 2014 budget has just been delivered to parliament and includes tax increases of €1.2 billion, mostly from record VAT receipts of €974 million, which almost brought a smile to the stony face of our tax collector general, Maria Luís Albuquerque.
For 2014, the forecast tax revenue as shelled out by Portuguese citizens and companies is €36.98 billion. In fact the contribution from companies is reducing due to lowered rates, as the take from citizens is rising to compensate.
This means that the final 2014 budget delivered to parliament predicts an additional €1.16 billion tax take when compared with the first 2014 budget. The major chunk of this comes from increased VAT receipts of nearly a billion.
The reality is that the government has proved unable to make the promised cuts in its own expenditure and state employee wage bill, thus pushing the burden onto the public and corporate sector to make up the shortfall.
In 2011 when Portugal hopped into bed with the men from Brussels, the state’s tax revenue was €34.4 billion, it then borrowed €72 billion from the Troika - but still the Portuguese taxpayer shells out more and more, now having to find money to cover the interest on Troika loans estimated at €1.5 billion a year.
The economy is performing better now and the fight against fraud and tax evasion is producing results. The 3.5% surcharge on income tax has been bringing in an extra €875 million per year as a ‘temporary measure’ but still the state needs more as its cuts in expenditure and 'structural reforms' simply have not produced the financial results promised.
The implied pact of cooperation between the state and the people was torn up years ago as government waste, profligacy and supercilious arrogance has resulted in voters paying for their masters’ mistakes, but with bad humour.
