Government to charge more 640 million euros in taxes – The Economic Journal

Know what you have to point out in your fiscal calendar until the end of the year - The Economic Journal

According to the report accompanying the State Budget proposal for 2019 (OE2019), delivered on Monday in Parliament, the Executive expects to raise 45.636 million euros next year, an increase of 640 million euros (plus 1, 4% more than the estimated tax revenue for 2018, from 44,995 million euros, which has now been revised upwards, with the government forecast to be 1.2 billion euros (2.8%) above what was in the approved state budget.

According to the Government, "the good performance of the economy in 2018" allowed the estimate of tax revenue to be revised upwards from that of the State Budget for 2018. "In fact, revenue in 2018 is expected to be around 1200 million euros (plus 2.8%) above what was included in the approved State Budget, "the report said, noting that in this revision of the estimate the positive performance of the IRC and VAT, which results from the growth of economic activity.

According to the report, "it is predicted that, in view of the estimated revenue for 2018, fiscal revenue will increase by 1.4% in 2019, with special emphasis on VAT, ISP , IRS and IS. "

In fact, indirect taxes are primarily responsible (80% of variation) for tax revenue growth, and to a lesser extent direct taxes.

The increase in tax revenue is thus mainly justified by indirect taxes, whose revenue rises by 1.5% in 2019, from a forecast of 25,570 million euros in 2018 to 25,947 million in the next year, that is, a rise of around EUR 377 million.

In turn, it is estimated that direct tax revenue (including IRS and IRC) will increase 1.4% from 19,425 million euros in 2018 to 19,689 million euros in 2019, plus 264 million euros between the two years.

The Government expects that the amount of tax revenue in Personal Income Tax (IRS) will total 12,905 million euros, plus 115 million euros compared to the estimate for 2018 (12,790 million).

The Executive explains that this increase of 0.9% of IRS revenue compared to the estimate for 2018 occurs "despite the negative influence on the income of the end of the surcharge and the restructuring of the echelons" resulting, he says, "of the trajectory of employment growth and of the average salary verified in recent years in Portugal, as well as the goal of income replacement recommended in the last three budgets. "

Regarding the Corporate Income Tax (IRC), revenue is estimated to have risen from 61 million euros to 6,336 million euros, a "slight increase" in tax revenue by 1% over the forecast estimate which, according to the Finances, despite the good performance in 2018, "can be shown conservative given the prospects of the national economy."

VAT: champion of revenue

In indirect taxes, the Value Added Tax (VAT) stands out, with which the Government expects to receive 17,499 million euros in 2019, 4.3% more than the estimated 16,776 million euros for this year. That is, another 723 million euros.

According to the Finance, "the improvement of the economic climate, and the increase of the consumption by residents and non-residents, allow to see an evolution of revenue in line with what has occurred in 2018"

Next year, the government estimates it will still receive 1.347 million (less about 4% than in 2018) with the Tobacco Tax (IT), less about 4% of the estimated 1,402 million euros by 2018.

According to the Ministry of Finance, in relation to excise taxes, "only in line with inflation is the Tobacco Tax" and that given the entry into force of the State Budget for 2020 in the first months of that year, elections will take place at the end of 2019, there will be a reduction effect of introductions to consumption in the last months of 2019, which justifies the estimate of reduction of income with this tax.

In the Stamp Tax, the Government estimates to charge 1,684 million euros, up 6.8% (107 million euros) from the estimated 1,577 million euros for this year. An evolution that, according to the ministry led by Mário Centeno, is "based on the trajectory verified in 2018 and on policies to discourage consumer credit."

In revenue from the Single Tax on Circulation (IUC), on Vehicles (ISV) and on Alcoholic and Sugared Beverages (IABA) next year the Government estimates to raise 395 million euros (9.1% more), 803 million euros 2.3%) and 296 million euros (2.4% more), with these taxes, respectively.

The Executive points out that similar to what happens with ISV and IT, the IUC rates are updated in line with inflation, and a correction factor was introduced in 2019, due to the new CO2 measurement system. "Nevertheless, given the expected growth of the national car fleet, a positive impact on IUC's tax revenue of 33 million euros (+ 9.1%) is estimated," he concludes.

As for the ISV, the Vehicle Tax tables are also updated to the inflation value and a correction factor for 2019 is introduced as a result of the new CO2 measurement system. Still, says the Government, "with the expected market growth, an increase in tax revenue is forecast at 18 million euros (2.3% more)".

Both in the ISP and in the IABA the general rates are maintained. Still, Finance advances, given the evolution of consumption, it is estimated that ISP revenue has a positive variation of 211 million euros to 3,643 million euros, mostly justified by the evolution of the carbon rate.

News initially published at 01:48

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