‘Windfall tax’ off the table for now

Portugal’s economy minister said on Tuesday that the government was not considering increasing tax on companies making extraordinary profits to cope with the effects of the war in Ukraine “at all” at this time.

“The cabinet, as I explained, never discussed that measure, but it is part of the letter of options. […] At this time, we are not considering it at all. We will see how the economy evolves and how we will respond to these developments,” Economy and Sea Minister António Costa Silva told journalists on the sidelines of the debriefing session on the Companies Programme Tourism 360º at the Electricity Museum in Lisbon.

During the discussion on the government programme on April 8, Costa Silva acknowledged considering a windfall tax due to increases in goods and raw materials.

Days later, at the end of the cabinet meeting, the minister said that the windfall tax had not been discussed but admitted that the government was studying “all possibilities”.

The minister explained that the ‘windfall tax’ was one of the hypotheses put forward by the European Commission and that Portugal has that measure as “a unique solution, should it become necessary.

The International Monetary Fund (IMF), on the first day of the Spring Meetings, also suggested a temporary tax increase on companies that show an increase in profits to support those that are being most affected by the generalised rise in prices.

“What the IMF says is no different from what I said, or what the OECD, the European Commission said. I can say that we have great respect for companies, and therefore we do not harass them. The minister stressed that companies are motors for the country’s economic development, motors for wealth creation,” the minister stressed.

The minister explained today that he raised this hypothesis because he is facing “a disaster” concerning the consequences of the war in Ukraine, and “a minister should look at all the options, monitor what is happening in the economy and try to ensure optimal conditions for the economy’s development.

Asked about the news advanced today by Jornal de Notícias that TAP does not use 100 daily slots at Lisbon airport and whether he was considering the possibility of withdrawing more slots from the airline, over and above the 18 required by the European Commission, Costa Silva said that it was an issue that was out of his hands and that his ministry’s responsibility was to be “attentive” to the “obstacles” to the development of the economy.

“On the TAP issues, it is not up to me. It is a colleague of mine who deals with that. What I can do and always do is work behind the scenes to raise awareness and create the conditions for the country’s development,” the minister said.

“It is clear that we are very attentive to everything that is the Portuguese economy, the bottlenecks, the obstacles to the development of the various areas and, therefore, we will always put that on the table,” he added.