This year, the average tax reimbursement is lower than last year and one of the explanations stems from the change in withholding tax tables, state a tax expert.
About a year ago, when 94% of the IRS returns submitted were already settled, the average value of the refund (which had then reached 2.6 billion taxpayers) was around 1,038 euros.
This year, the latest data on refunds were announced by the Minister of Finance, during a parliamentary hearing at the end of June, in which Fernando Medina said that 2.7 million taxpayers had already been reimbursed, equating to 2.6 billion euros.
Thus, the average refund this year is around 963 euros, €75 lower than last year.
This decline, which has been felt and surprised many taxpayers who say they have not had a large difference in income and deductible expenses between one year and the next, is mainly associated with changes in withholding tables.
“The withholding tax tables have been adjusted,” says Luís Leon, co-founder of the consultancy ILYA, seeing here the main justification for a reduction in the amount of reimbursement. The purpose of this adjustment, he recalls, is to bring the amount of tax that is advanced monthly closer to that which the taxpayer has to pay.
The measure is positive, he says, stressing, however, that people have to remember that by receiving more [cash] monthly, they will have a lower refund – there are cases in which they may even be called upon to pay some tax.
That is, the financial ‘cushion’ that the reimbursement constituted for some families, has been reduced with the change to the withholding tables – which in 2022 were adjusted three times – and this situation will be even more evident from now on, due to the entry into force of the new tables, from this month. He then stressed that the refund consists only of the difference in the tax that each person has to pay compared to the amount that has already advanced (via withholding tax), Luís Leon recalls that in some cases the difference may also be related to the existence of tax debts – a category that includes, for example, the forgetting of the payment of the IUC -, situation in which tax benefits are not taken into account.
Paula Franco, head of the Order of Certified Accountants (OCC), also associates the drop in reimbursement reported by many taxpayers with changes in withholding tables.
For some two or three years now, the withholding tables have been designed trying to get closer to a more realistic situation in relation to the final tax,” says Paula Franco, noting that in the face of lower withholding tax, “it is natural that the refund also goes down.”
Paula Franco adds another argument, recalling that in 2022 although in a smaller size than this year, many workers had some increase, while the withholding tax was reduced, which also helps to explain the difference in the reimbursement.
Samantha Gannon
info at madeira-weekly.com
