Portugal’s tax burden rises, but is below the European average

  • ECO News
  • 30 October 2019

The weight of taxes and social contributions in relation to GDP grew in the European Union in 2018, to 40.3%. In Portugal, the tax burden was 37.2% of the wealth generated in the country that year.

The tax burden increased again in the European Union last year. Portugal was one of the countries where the weight of tax and social contribution revenues concerning Gross Domestic Product (GDP) grew for the second consecutive year but remains below the European average.

The figures revealed by Eurostat on Wednesday show that the tax burden averaged 40.3% in the European Union and 41.7% in the Eurozone.

In this context, Portugal, despite continuing to see the weight of taxes and social contributions growing in relation to the wealth created in the country, continues to be below the average, both in the European Union and in the Euro Zone. Last year, the tax burden in Portugal corresponded to 37.2% of GDP, up from 36.5% in 2017.

By type of revenue from taxes and contributions collected by the Portuguese government, the largest share corresponded to taxes on production and imports. It accounted for 15.4% of total revenues, followed by social security contributions, which accounted for 11.7%, and taxes on income and wealth, with a tax burden of 10.1%.

Among the 28 Member States of the European Union, Portugal is more or less in the middle of the table, with the 15th highest tax burden. In the Euro Zone, it is in the 11th position.

At the European level, the tax burden varies between Member States, with France being the country with the most taxes and contributions to GDP: 48.4%. This is followed by Belgium (47.2%), Denmark (45.9%), Sweden (44.4%), Finland (42.4%) and Italy (42%).

Ireland (23%), Romania (27.1%), Bulgaria (29.9%), Lithuania (30.5%) and Latvia (31.4%) have the lowest tax burdens.