The government has announced plans to introduce a major change to the way taxes are collected, in a bid to combat fraud and tax evasion.
The responsibility of declaring how much tax is owed will be swapped over, with the taxpayer expected to provide proof should they feel the tax bill they receive is unjustified. News of the radical new measure was delivered by the Finance Minister, António Bagão Félix, as he outlined the points of the 2005 state budget that have been approved by the Ministers’ Council and will now be put to parliament. Following the meeting, Bagão would only reveal to the press that there were going to be a range of “brand new measures” to combat fraud and tax evasion.
The Finance Minister is also considering the possibility of lowering IRS (income tax) for the lowest income bands, for example, the lowest tax level would be reduced from 12 per cent to 10.5 per cent. The maximum tax of 40 per cent would remain unaltered.
Fulfilling Durão’s legacy
Later in the week, the Prime Minister seemed to contradict Bagão Félix’s announcement that changes would be made to bands and the ways in which families with lower earnings would benefit. Instead, PM Santana Lopes spoke of the lowering of taxes in general terms.
Several MPs from the opposition parties then confronted the Finance Minister asking him to justify the apparent change in position from the government. He explained that the objective was to benefit families with the lowest incomes, in the most simple and direct way, by altering taxes as promised by the previous Prime Minister, Durão Barroso.
Parliament will finally approve the budget in almost two months time, on December 6 and 7. A general discussion is booked for November 17 and 18.