Inland councils reduce taxes

IN A bid to help families and encourage people to move to Castro Marim and Alcoutim, both Câmaras have approved the reduction of IRS tax rate on official residents within the council areas.

This measure is part of a law that was passed in 2007 to protect inland areas affected by a rapidly declining population by returning five per cent of each tax payer’s IRS from 2008.

Alcoutim Câmara President Francisco Amaral said that he believes the measure showed some positive effects last year when it was applied, with 75 new registered residents in the council.

“For the first time, and contrary to the trend of the last several years, there is a reverse in the council’s demography, with 75 new registrations against 50 deaths,” he said.

Alcoutim’s decision means it will lose around 40,000 euros this year. Francisco Amaral, however, sees this move as an investment “to stop the desertification that has been seen in the council in recent decades”.

Castro Marim council will also be missing out on a possible 170,000 euros from taxes, as it has approved the tax cut as an incentive for existing residents to stay and new ones to move into the area. As an added incentive for residents to stay in the council, a project is being developed for a six star tourist resort to be constructed in the parish of Azinhal in Castor Marim.

This Herdade de Corte Velho development will cover 135 hectares near the Guadiana River and includes an 18-hole golf course, a golf club, a hotel, a residential village, an apart-hotel and villas, representing an investment of around 200 million euros. This is expected to create more than 5,000 direct and indirect jobs.

José Estevens, President of Castro Marim Câmara, told The Resident: “The plan was approved at the end of last year and the promoters are now creating the plans for allotting the golf course and residential parts as well as carrying out the necessary environmental studies, before plans are submitted to the Câmara for approval.” He added that there is no date for construction yet.

Following the tax relief trend, Loulé Câmara has planned to lower resident’s IRS tax from five per cent to three per cent. According to the Câmara, of the 44 councils throughout Portugal that decided to lower IRS, Loulé is one of 11 that will receive less from the government’s annual budget. In total, Loulé has abdicated from a possible 1.2 million euros.

Following a different strategy, Vila Real de Santo António (VRSA) has opted to apply the maximum amount of IRS tax on its residents. Its mayor Luis Gomes has said that the money raised will be invested back into the community. “As the IRS tax is calculated according to people’s earnings, what we try to do is channel that money to those with less financial means,” he said.

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