Finance Ministry nets biggest ever tax catch

THE PORTUGUESE Ministry of Finance recorded its largest tax receipts ever last year thanks, according to Finance Minister, Fernando Teixeira dos Santos, to improved efficiency and tighter controls.

The government’s financial receipts increased by 2.1 billion euros in 2006 and the state’s sub sector budget deficit fell by 7.4 billion euros.

Santos confirmed that by bringing the budget into line the government was “on the right path”, but “strict pressure had to be kept up”.

In total, the treasury received 32.6 billion euros in 2006, 7.2 per cent more than in 2005 and 0.6 per cent more than was anticipated in the State Budget for the year.

Expenses

Overall, State expenses rose by 2.4 per cent in relation to 2005, to a total of 43.06 billion euros “mainly because of transfers to other sectors, such as health and social security”, explained the minister.

The government managed to reduce expenses through employees by two per cent, but expenses and government borrowing interest increased by 10.8 per cent.

“With a deficit of six per cent in 2005, it was obvious that the debt stock in 2006 was going to be higher,” said the minister, adding that “we had to pay more in interest because we owed more and because taxes had increased”.

Santos refused to be drawn into conjectures as to the final total value of the State deficit, but said he would reveal the figures in March when he presented his annual report to Brussels.

“There are signals that give grounds for confidence, but the sacrifices will have to continue if we are to bring the budget deficit to below the three per cent limit imposed by the European Union Stability Pact,” he said.

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