Government wants to apply tax on renewables

The end of tax exemptions on renewable energies is just around the corner, as the government started to negotiate with the Left party BE and the communist party PCP, the extension of extraordinary contributions on the energy sector to this segment.

The tax exemption was part of a special framework designed in 2014, as Jornal Económico announced this Friday (limited access/content in Portuguese).

The idea was already part of BE’s plan from last year’s state budget, which António Costa now has recovered. If parties come to terms with the end of the tax exemption, the measure will already be part of the State Budget 2019’s proposal.

It is indeed not a new issue, as, for this same proposal, the socialist party changed their mind in the midst of the negotiations for the State Budget of 2018, after initially having accepted the tax on renewables, proposed by the leftists.

At the time the prime minister António Costa was accused of making PS pull back last-minute on the measure. Costa cautioned his party’s deputies that the measure would be perceived by the energy operators as a “declaration of war”.

In the face of the accusations, the President of the Socialist Party, Carlos César, said the decision was not connected with any type of lobbying from the energy industry, indicating the main reason to be the “national interest”, guaranteeing the application of that measure would be premature.

However, PS’s pull-back from this issue has given BE the chance to scrutinize their opponents, accusing the government of “dishonesty” and of not being able to “keep their word”.