The tax burden increased by 14.9% in nominal terms in 2022, reaching 87.1 billion euros, which corresponded to 36.4% of GDP, up from 35.3% in the previous year, according to the National Statistics Institute. (INE).

According to the institute, revenue from direct taxes increased by 24.1%, “mainly reflecting the evolution of revenue from personal income tax (IRS), which grew by 12.8%” (an additional 1.925 billion euros ).

Effective social contributions increased by 10.2%, reflecting, “namely, the growth in paid employment, salary updates and the rise in the minimum wage”, while revenue from corporate income tax (IRC) rose by 59.6% %, “benefiting from the more favorable behavior of the Portuguese economy in 2022”, according to INE.

The nominal increase in IRC in 2022 was 2.897 billion euros, more than exceeding the values ​​recorded in the pre-pandemic period.

Indirect taxes increased by 12.2%, with revenue from value added tax (VAT) rising by 18.1%, (after a growth of 13.7% in 2021), highlighting the growth in revenue from the municipal tax on costly property transfers (+26.3%).

In 2022, VAT represented 61.5% of revenue from indirect taxes (58.4% in 2021), with revenue from this tax amounting to 22.6 billion euros, 3.452 billion euros more than in the previous year , corresponding to an increase of 18.1%.

“The performance of the economy and the significant increase in price levels explain, to a large extent, the behavior of revenue from this tax. In effect, there was an increase in the private consumption of resident families, which stood at a further 12.6% in nominal terms, in 2022, and in the final consumption of non-residents in the economic territory (tourism exports), which registered a significant positive variation of 109.7%, reaching nominal values ​​higher than the pre-pandemic period by around 15%”, explains INE.

The institute also highlights increases in revenue from tobacco tax (+8.4%), stamp duty (+6.6%) and vehicle tax (+5.3%).

The tax on petroleum and energy products was the only one of the main taxes to see its revenue decrease (-21.3%, or 757 million euros), “as a consequence of the measures implemented by the Government to mitigate the increase in fuel prices” .

Considering 2021, the last year with information available for the European Union (EU27) and excluding taxes received by European Union institutions, Portugal continued to have a tax burden of 35.1% of Gross Domestic Product, which is lower than the EU27 average ( 40.5%), says INE.

In 2021, among the 27 Member States, Portugal was the 9th with the lowest tax burden, “a lower record, for example, than Spain (38.3%), Greece (39.2%) and Italy (43.1%)”.

The statistical institute also states that, in 2020, the most recent year with detailed information necessary for its calculation, the VAT GAP was estimated at 267 million euros, which is equivalent to 1.6% of the VAT charged in the year, a decrease of 0.7 percentage points compared to the value observed in 2019.

Essentially, this indicator measures the difference between the so-called theoretical VAT, that is, the VAT that would result from applying legal rates to goods and services subject to this tax in transactions recorded in national accounts, and the VAT actually charged by Public Administrations, explains the INE.