Tax burden hits new record high in 2018, at 35.4% of GDP
The tax burden went up to 35.4% of GDP in 2018, after reaching 34.4% of GDP in the previous year.
The tax burden went up to 35.4% of GDP in 2018, after reaching 34.4% in the previous year, the highest figure ever, which was also observed in the year 2015, according to the National Statistics Institute (INE). This increase in comparison to 2017, occurred despite the slowdown in GDP in 2018 in contrast with the previous year.
With the publication of data looking at public finances this Tuesday, INE updated a series of information, which includes the calculation of the tax burden.
Data from last September showed that the fiscal burden measured as a percentage of GDP in 2017 had risen from the previous year but remained at a level equal to that of 2015.
These conclusions have made it possible to introduce new issues into the political debate. Passos Coelho (responsible for governance for almost the entire year 2015) and António Costa (responsible for 2017) were both prime ministers responsible for the greater records in terms of tax burden.
However, the numbers known this Tuesday show that the tax burden has continued to increase in 2018, reaching a new record high.
The Government has argued that in relation to previous years the increase in the tax burden is now motivated by the dynamism of the economic activity and the growth of employment, not due to a rise in tax rates. Still, this Tuesday, the finance minister admitted that tax revenue grew last year by €2.050 million more than expected.
The concept of the tax burden used by the INE in its disclosures corresponds to the total income from taxes and social contributions of the government and the European Union, excluding social contributions attributed.
The rise in the tax burden was driven by increases in income taxes (IRS and IRC), which increased by €1.225,3 million. VAT revenues increased by €1.040,4 million. In total, the tax burden increased by €4.329,8 million.
