“The tax burden increased nominally 2.5 percent in 2016 after the increase of 4.6 percent observed in 2015, reaching a value of 63.6 billion euros,” the INE said in a statement. “However, relative to PIB, a reduction of 0.2 percent in this indicator was recorded … to 34.4 percent of GDP, after the value of 34.6 percent recorded in 2015.”
According to the institute, the nominal growth of 2.5 percent in the tax burden (revenues from taxes and social security contributions) was half a percentage point below the rate of nominal GDP growth, of 3.0 percent. It noted that “since 2012 there had not been a change in the tax burden less than that of GDP.”
This resulted, the INE explained, largely from the fact that revenues from direct taxes – where personal income tax dominates - fell by 1.9 percent, thanks in part to the elimination of the surcharge imposed during the economic adjustment programme implemented as part of Portugal’s Eurozone bailout.
The country’s tax burden last year (excluding taxes received by European Union institutions) was below the EU average of 39.2 percent, with the country having the 11th lightest burden, just above Spain, with 33.8 percent.