Portugal’s families and businesses have paid €30 billion in tax so far this year.
Figures released today show that in the year to the end of October the public coffers have continued to fill at a rate that exceeded the most optimistic forecasts of the Ministry of Finance.
Almost 17% of the country’s GDP is now made up by taxing her citizens and businesses.
This is an increase of 6.8% year on year, which exceeds the latest government forecasts despite concerning falls in corporation tax receipts and stamp duty.
According to the Ministry of Finance, "the cumulative net revenue from indirect taxes increased by 5.9% and the cumulative net revenue from direct taxes grew 7.9% year on year," specifying a particularly positive performance from the dreaded VAT, up 7.2%, and personal income tax up 10.8% compared to 2013."
The revenue from VAT and income tax is a result of "the recovery in economic activity and the increasing effectiveness of new measures to combat tax evasion and the black economy for VAT and income tax."
The Government does not mention the drop in corporate tax which fell 3.9% year on year but if economic activity is booming as is suggested, then this has failed to produce additional profits to tax.
Many companies are now domiciled outside Portugal for tax reasons, Holland being a favourite and Luxembourg a close second, stating their foreign registration enables them to access funding with greater ease than if based in Portugal where they trade.
This ruse also allows these companies to avoid paying corporation taxes to the Portuguese government and allows them to wallow in the warmth of cozy tax deals made with other less aggressive EU tax regimes.
In addition to the direct and indirect taxation, companies and families had to shell out an astounding €11.2 billion in social security contributions which are used to fund current government expenditure. These increased 3.3% year on year made up partly by a marginal rise in the paid employment level.
When social security income is added to the other taxes, the country's voters have in effect send the government over €40 billion in the first ten months of the year.
In its hard-nosed tax policy, the country’s tax department also has seized and sold off almost 65,000 properties from Portuguese citizens and businesses, double the number than in the same period last year.
The Socialist Party proposed a suspension of these forced sales of peoples’ homes but was voted down in parliament as being far too friendly to the poor - the public accounts must always come first.
The real cost of this misery only can be guessed at but 64,955 property owners who have often lost all and have been made homeless by the state as they cannot pay their tax demands are unlikely to be voting for the coalition next year.
Each day this year there has been an auction on average of 197 land, houses, and business premises due to taxes owed.
Add to this the property foreclosures by banks and many might ponder the human cost to this austerity period, known more realistically as a harsh, biting recession.
