"The motives of political nature, and often without an adequate technical basis, which is underpinning the creation of tax benefits, may be contrary to the need for simplicity of the tax system and of mandatory expenditure control,” said the report made by a working group appointed by the government to assess the tax benefits in force in Portugal.

The document said that, in some cases, the "inability of ascertaining the associated expenditure and/or the number of beneficiaries" which ultimately prevents the evaluation and guarantee of the effectiveness of such instruments.

Portugal currently has 542 tax benefits, and if these are to be added to the preferential rates of VAT, that is, the rates in force in the islands and the reduced and intermediate in force on the mainland, the overall value of expenditure of these instruments amounts to €11.7 billion.

In the 2019-2023 Stability Programme, the government expects a reduction in tax benefits of €90 million per year between 2020 and 2022, totalling €270 million.

According to the report, of the 542 existing tax benefits, the vast majority focus on direct taxes, especially the IRS with 147, namely personal deductions, collection and specific and preferential rates.

Identical to the reading done to corporate income tax (IRC), to which 121 tax benefits are associated, In this case, the report highlighted that about a third of Portuguese companies do not pay IRC.

In the list of taxes with the highest number of deductions, exemptions or other mechanisms of the tax invoice follows the VAT (with 79), the stamp duty (61) and the vehicle tax (37).

In early May, the parliament discussed a government diploma that proposed the repeal of three tax benefits, the extension without amendments of seven and the extension with amendments of the other five.