Álvaro Santos Pereira, the Minister for Economy and Employment, held a three-hour meeting last week with the bosses of some of Portugal’s biggest companies. Included on the agenda were the thorny issues of IRC and IRS tax cuts.

Among those attending were António Pires de Lima, chairman of brewing company UNICER and president of the CDS-PP National Council, António Mexia, executive president of EDP, Henrique Granadeiro from PT and Belmiro de Azevedo, chairman of SONAE (the owner of Público newspaper).

During discussions, Santos Pereira emphasised the need for Portugal to lower its corporate tax rate, promote fiscal stability and create a robust business environment in order to attract foreign and domestic investment. To that end, he asked for a commitment [by other parties] that assured fiscal and legislative stability. This was the same day that, according to news agency Lusa, leader of the PS parliamentary bench Carlos Zorrinho assumed that “an integrated perspective on taxation” would have the backing of his party.

Santos Pereira did not indicate when the government might be in a position to reduce what he called “family taxation” and said nothing about the statements of Paulo Portas, who earlier had recommended that the reduction of these family taxes take place within the present legislature. Instead he said he supported the idea of a lowering of IRS “when possible” but did not commit to a deadline. He did, however, reveal that the government is establishing a basis for IRC reduction and “if there is room [to also] decrease the overall taxes that families have to pay.” Santos Pereira pointed out that this is an issue mentioned often by the Prime Minister.

Minister listens to proposals voiced by entrepreneurs

Regarding the measures aimed at companies, Santos Pereira asked again for consensus, throwing an indirect plea to the PS: “There has to be a system of governance about taxation, an agreement about finance issues, namely the establishment of financial development institutions.”

As to the concerns expressed by his guests whom he had “a frank conversation” with, the minister acknowledged the fact that large companies clearly believed that it’s possible to implement additional policies and measures aimed at balancing financial and energy costs, increasing internal market promotion and beefing up the Portuguese economy’s competitive edge.

Questioned about what he told the business executives concerning levels of finance, Santos Pereira was non-committal. “The companies obviously expressed their concern about what they called the ‘competitive disadvantage’ that our country still [suffers from] at a financing level,” he said, adding that it was important to reduce credit restrictions but at the same time urging companies to diversify their financing sources.

After the meeting, Pires de Lima mentioned nothing about the concerns voiced to the minister by his colleagues, and said only that “it had been a very useful meeting” and that his views are well known.

This was the first of several face-to-face meetings Santos Pereira has planned with business chiefs which he believed would arm the government with proposals over “the coming days” that could be added to “the industrial growth strategy”.

In addition to EDP, PT, Sonae and Unicer, the meeting numbered 17 other heads of national and affiliated multi-national companies:Petrogal, Jerónimo Martins, Volkswagen Autoeuropa, Peugeot Citroën Portugal, distribution group Auchan, developers Mota-Engil, Soares da Costa e Teixeira Duarte, paper manufacturer Portucel, Nestlé Portugal, Siemens, Somincor (Sociedade Mineira de Neves-Corvo) and Sumol and Compal.

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