Tax office and social security claws back 850 million euros

news: Tax office and social security claws back 850 million euros

THE PORTUGUESE government’s ‘get tough on tax dodgers’ policy seems to be paying dividends as it has clawed back 850 million euros owed to the state this year.

It has so far launched 50 tax swoops on businesses and individuals, which had either failed to pay their taxes or had fallen behind. By December, the tax office hopes to have netted a total of 1.3 billion euros in back taxes that should have been paid by April.

Up until August, it had managed to claim 700 million euros in monies owed to the government, which Prime Minister José Sócrates said was an extraordinary result.

New state of the art computer systems installed at the tax offices and other state agencies mean that contributor details can be crosschecked and referenced more easily.

If the government indeed achieves its target by December, it will have effectively raised the state receipts by three per cent. The Minister of Finance, who claimed the net was tightening around the property and building industries, said that he expected an extra 21 million euros to reach government coffers by the end of this year.

As for 2006, the Ministry of Finance believes it will bag an extra 500 million euros by beating fraud and tax evasion and through more efficient working practices.

BPI economist, Ana Paula Carvalho, said: “the type of measures the government is currently following must be kept up constantly, not just when it’s facing budget problems. It’s all about changing people’s mentality and making them realise that people have to pay taxes and will be pursued and penalised if they don’t.

“If they are made to pay their taxes and realise they can’t get away with tax evasion, then public services will operate better and people will start to respect the system and come to realise that tax paying is fair and just in a modern democracy,” she added.