Fiscal load increased by 2024

The fiscal burden rose again in 2024, after declining the previous year. The Public Finance Council (CFP) revealed on Tuesday that the increase in the weight of indirect taxes and social contributions more than compensated for the reduction in direct taxes.

According to the CFP’s report “Budget Evolution of Public Administrations in 2024”, the tax burden of public administrations, measured by revenue from taxes and effective social contributions, increased 0.1% of Gross Domestic Product (GDP) in 2024, setting in 35.6% of GDP.

Thus, last year, the Portuguese state raised a greater proportion of the wealth produced in the country through taxes and social contributions more than a third of all the richness generated by the economy was intended to finance public expenses, in a slight increase in tax effort by citizens and companies.

According to the report, quoted by the Lusa Agency, « this increase resulted from the increase in the weight of indirect taxes and effective social contributions, which have compensated for the reduction verified in direct taxes. »

According to the CFP, the indicators that measure the weight of taxation on their basis rose: effective social contributions corresponded to 22.1% of remuneration, IRC rose to 18.6% of the gross surplus of business exploitation and IVA and IEC (special consumer taxes) increased to 18.2% of nominal private consumption.

These indicators have reached « historical maxims of the last two decades. »

On the contrary, IRS on specific labor income reduced its weight in remuneration to 8.8%.

According to the body led by Nazaré da Costa Cabral, globally, public revenue grew 6.3% in 2024, exceeding the amount provided for in the State Budget (OE) for this year, « driven by the robustness of tax and contributory revenue. »

Already the public expense accelerated in 2024 for the third consecutive year, increasing 7.6), in part due to greater execution of PRR. Despite the growth, it was below the forecast in the OE/2024.