Government behind on paying local authorities

LOCAL COUNCIL authorities, including Lisbon, are faced with huge holes in their annual government budget handouts. But it isn’t because the government doesn’t have the money. It’s because of a technical glitch…

The tax office is behind on its accounting due to the installation of a new, up-to-date computer system, but problems getting to grips with the new technology are slowing things down.

Principally at risk is the vehicle tax stamp (Imposto Selo Automóvel), which represents 114 million euros for local authorities from the sale of 3,884,282 tax stamps. However, stressed tax officials, struggling to cope with the new computer programme packages, have so far only managed to process 50 per cent or 1,931,647 of the total sales. The average cost of a vehicle tax stamp for a car in Portugal is between 30 and 50 euros per annum.

In the first quarter of the financial year, local and municipal authorities were in the red to the tune of 174 million euros, which was three times higher than for the same period in 2004 when it registered 53 million euros. Up until August 8, Lisbon’s District 11, which sold 18,863 tax stamps, had only received the money from 757 of them.