Mendonça Mendes: IRC relief is selective. Changes in autonomous taxation, only outside the OE – State Budget


The official underlines the IRC “selective relief” measures that have been taken for companies, in the case of the end of the special payment on account (PEC), one of the fiscal initiatives provided for in the State Budget proposal for 2022. In the interview , to be published in full in the edition of Monday, May 9, of Jornal de Negócios, Mendonça Mendes maintains that the autonomous taxation imposed on companies is another area where the Government wants to act, but outside the Budget. And he argues that the best solution will not be elimination, as was decided in relation to the PEC.

If it were not for the current moment of crisis, would there be room for more structural measures instead of extraordinary measures?

The extraordinary measures complement the structural part and in the structural part there was nothing to be postponed. The IRS reduction that we had planned to do in two phases, one in 2018 and another in 2022, was fulfilled. The reductions that we have made in relation to companies have also been implemented. Because we have always had the same approach: reducing the IRS for the lowest incomes and for the middle classes, supporting the younger with the IRS, supporting the birth policy with the IRS, supporting deductions for couples who have more than one son, and also use the IRS to promote public policies such as zero IRS rate leases for all homes that are in affordable rent, whether in government programs or municipal programs. At IRC we have a selective tax relief policy.

Very selective…

Selective for small and medium-sized companies that saw the end of the special payment on account that is 200 million euros.

There were few companies that still made these payments…

There it is, it has to do with the consistency with which we have made fiscal policy. When the governance cycle started, led by Prime Minister António Costa, the special payment on account was worth 200 million euros. Gradually, we ended up with it, either because we reduced its value in a first phase, or because in a second phase we removed the obligation to deliver it to taxpayers who had the declarative obligations in order, or because it is now so residual and worth 10 million of euros that we can finish it once and for all. We took this route with regard to the special payment on account, but also, for example, when we removed the minimum collection in the simplified IRC. And selectivity is also seen in the support to small and medium-sized companies with the extension of the limit of the special IRC rate. Slow but sure steps – so we don’t have to go back with the structural measures. And so all this selectivity, which also translates into support for research and development, means measures that together amount to several hundred million euros. Yes, there is a selective tax relief for companies.

Six months ago he said that there was the possibility of using autonomous taxation in the same way as was done for the special payment on account.

Honestly, I think we should look at this issue because today there are ways to more effectively guarantee that those expenses are actually expenses of the company or if they are expenses for the private use of the partners. It’s not easy to make this transition, but I think it’s an area that should be…

Is it a measure for the next budget… the 2023 one?

I have this position: I think that the State Budget is not the most appropriate place to make structural changes in fiscal terms.

But they will end up with the special payment on account in a State Budget…

It’s true, it’s true. We have a habit for many years of putting everything fiscal policy in the state budgets. And I am also making a mea culpa as a political leader. It is true because it is always more comfortable to put it in the state budget, but this takes away space for deeper discussion to improve solutions.

But in the case of autonomous taxation, there is no need to go into more depth in the discussion because the topic has already been talked about a lot and by itself too, so now it’s just a case of deciding how they end and when.

I’m not sure the ideal solution is to end autonomous taxation. What I admit is that in the autonomous taxation regime, it must be seen whether there are certain realities that may or may not be removed from the scope of autonomous taxation, which is different. Note, the special payment on account was a measure to combat fraud and tax evasion. That was its genesis. And therefore it ceases to exist at a time when it no longer seems to be such a relevant instrument in this regard. But autonomous taxation also has this nature and it is necessary to have some balance in the way we look at them..

For example the charge on vehicles?

Right, but I don’t know if there shouldn’t be a limit in this charge on vehicles either, for example, in terms of exemption from autonomous taxation with regard to the realities of electric electric vehicles. Whether they are all electric vehicles that can be or whether a limit value is set as there is in other taxes. What I’m saying is: there are several issues that can and should be evaluated in this context, but I don’t think it’s a matter that, if it’s to make a structural change, it’s in the State Budget. In this OE, there is the suspension of the relief of autonomous taxation in case companies have a loss and whether they were companies that before the pandemic did not have this loss. Therefore, this type of one-off measures seems to me to be appropriate. Now, a deeper reflection, I think, should be sent to another seat other than the State Budget.


Source: Jornal de Negócios by www.jornaldenegocios.pt.

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