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Tax Revenues Increase

In a press statement, the Regional Secretariat for Finance says that, according to data compiled until the end of 2023, the tax revenue collected by the Region has increased over the last 12 months.

An increase that, they note, is due to “the excellent economic and business performance,” which extends to several sectors of activity.

“However, the fact that there is higher revenue, does not mean that they have increased the tax rates paid, because the Regional Government has, since 2016, been working on reducing taxes, reducing the tax effort, and returning income to families and companies.

In fact, compared to mainland Portugal – where the tax burden is 6 percentage points higher – Madeirans and Porto-Santenses pay much less tax for every euro they receive in salary, for every litre of fuel they buy, for every euro of business income.

Similarly, revenues from corporate income tax, personal income tax, VAT, and other taxes increase proportionally to the greater number of companies in activity, jobs employed and wages paid, and greater consumption.

In the case of personal income tax, for example, the Regional Government has been reducing these rates, year after year and also in 2023, so the increase in tax collection is mainly the result of the historical maximum of the active population that the Region employs, as well as the increase in monthly salaries received by taxpayer workers.

On the other hand, as IRS, IRC, and VAT tax rates are lower in the Region, the increase in revenues results even more directly from the strength of economic activity.”

“It should be noted that in addition to the tax reduction that has been advocated since 2016, the proposed Regional Budget for 2024 – which was not discussed in the Regional Assembly – also provided for a new reduction, so the tax relief measures implemented specifically by the Regional Government, already reach a total of 436 million euros returned to Madeirans and Porto-Santenses.

Concerning VAT, the Regional Government has already reaffirmed, on several occasions, the desire to lower these rates, IF and WHEN the rules contained in the Regional Finance Law are changed, which, at present, are unfair because they do not apply the simple capitation method, which would mean that the Madeirans and Porto-Santenses themselves would be forced to pay for their insularity when this is a constitutional responsibility of the State.

In the same way, the decision not to touch VAT at the present time is a responsible choice by the Regional Government, in the sense that taxes cannot be reduced all at the same time, without jeopardizing the sustainability of regional public finances and, more importantly, the quality of the services provided, namely in terms of health, education – which are the ones that have the greatest weight in public spending – not forgetting, also, other essential public services for the population.”

Samantha Gannon

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