The Portuguese tax burden dropped 0.2 percentage points in 2023, when compared to the previous year.
Despite the projections made by the former Government, in which the value would account for 37.4% of the country’s GDP (which would be a new record), last year, the burden accounted for 35.8% of the country’s GDP.
According to the National Statistics Institute, this was the first decrease of the tax burden since 2019, and the official value keeps Portugal below the EU tax burden average (40% of GDP). However, in nominal terms, in 2023, the tax burden increased by 8.8%. In fact, in nominal terms, the Portuguese tax burden has grown by 78.1% since 2012. This represents a sharp increase.
This means that, even though the value of the tax burden dropped, in terms of percentage of the country’s GDP, the Portuguese do not pay less taxes. In fact, they pay more.
In 2023, social contributions increased by 11.7% as a result of the growth of paid labor, salary updates, and the increase of the minimum wage. The revenue coming from direct taxes increased by 10.7%, and the one coming from indirect taxes, by 5.5%.
