Tax burden was 35.8% of GDP

In 2023, tax burden increased 8.8% in nominal terms, attaining 89 billion euros, corresponding to 35.8% of GDP (36% in the previous year). Considering 2022, last year with data available for the European Union (EU27) and excluding taxes received by EU institutions, Portugal continued to register a lower tax burden (35.8%) than the EU27 average (40.0%).

Direct tax revenue increased by 10.7%, mainly reflecting the 9.4% increase in personal income tax (IRS) revenue. Revenue from corporate income tax (IRC) rose by 13.9%, continuing to benefit from the favourable behaviour of economic activity in 2023.

Indirect taxes grew by 5.5%, with the proceeds from value added tax rising by 5.1% (18.4%, in 2022), standing out also the rise in revenue from tax on petroleum and energy products (15.9%), after the sharp decline recorded in the previous year (-21.3%). There were also increases from excise duties on ethyl alcohol and alcoholic beverages (5.9%), from tax on motor vehicle sales (5.0%) and from excise duties on tobacco (3.5%).

Social contributions rose 11.7%, benefiting from the growth of paid employment and from the increase of the minimum wage.