In 2021, tax burden increased 7.1% in nominal terms, attaining 75.6 billion euros, corresponding to 35.8% of GDP (35.3% in the previous year). Portugal continued to register in 2020 a lower tax burden than the EU average (-5.2 percentage points).
Direct tax revenue increased by 2.2%, mainly reflecting the 5.7% increase in individual income tax (IRS) revenue. Social contributions rose 6.9%, benefiting from the growth of paid employment and from the increase of the minimum wage. On the other hand, revenue from corporate income tax (IRC) fell 6.6%.
Indirect taxes, with an increase of 10.6%, were the component that contributed the most to the upsurge of nominal revenue. Proceeds from value added tax increased by 13.4% (-10.6%, in 2020), standing out also, the rise in revenue from the tax on petroleum and energy products (+7.7%) and stamp tax (+10.4%). There were also increases from real estate transfer tax collected by Local Government (+37.1%) and from real estate tax collected by Local Government (+2,1%). Revenues from excise duties on tobacco and tax on motor vehicle sales fell 0.1% and 3.0%, respectively.
In 2019, the most recent year with detailed information for its compilation, the VAT gap was estimated at 450 million euro, corresponding to 2.3% of the VAT revenue of the year, an identical value to that observed in 2018.