"The fight against tax fraud can be decisive in reducing income tax." Without committing to lower income tax for 2015, the Secretary of State for Fiscal Affairs Paulo Nuncio said today that there had been a huge increase in the tax take this year as a result of his anti-fraud measures, which gives him a degree of flexibility.
The contribution to the exchequer from Nuncio’s clamp down on tax evasion and his pursuit of those engaged in the underground economy has meant record tax receipts which may be decisive in the decisions that the Government takes over income tax for 2015.
The Secretary of State for Fiscal Affairs did not commit to reduction in the headline rate of income tax, nor is it his place to do so, but he said the increase in revenue expected this year is a factor that will be taken into account as the Finance Minister does her sums for the 2015 Budget.
According to Nuncio, the success of combating fraud, tax evasion and the underground economy has been a decisive element in the wider reforms of the system and "the results are already being seen." To this must be added the rise in VAT and other taxes that currently is relieving the Portuguese population of an estimated record €37 billion a year.
A substantial part of the tax revenue in 2014 is a direct result of a set of measures to combat fraud and tax evasion, according to this tax man. This protects good taxpayers at the expense of those that have been fiddling the system.
This is "essential for greater tax fairness and justice and this also may be important in looking at income tax for next year" reiterated Nuncio.
The final draft of recommendations by a tax experts committee, led by Rui Duarte Morais from Coimbra University, will be delivered to the Government by the end of September and will be taken into account by the Minister of Finance who currently is devising the 2015 Budget for release in early October.
Without committing to a dropping income tax, Nuncio did say that committee had been asked to look at simplifying the tax regime which should value "effort, merit and work" and should "protect the family with special regard to encouraging more babies to reduce the country’s demographic deficit.”
