DREM releases Statistics on Tax Revenues for 2021

The Regional Directorate of Statistics of Madeira (DREM) updates today the time series of "Tax Revenue Statistics" with reference to the period 2006-2021, with information for the years 2020 and 2021 still being provisional and preliminary, respectively.

This time series was compiled by Statistics Portugal (INE) as part of the preparation of the national "Statistics on Tax Revenue", and primarily results from information provided by the Regional Directorate of Budget and Treasury (DROT) to DREM, for the production of INE's quarterly and annual Public Administration Statistics (and also under the Excessive Deficit Procedure), complemented with other data collected from Central Administration by INE. The information is compiled with reference to the 2016 benchmark year of the Portuguese National Accounts, underlying the conceptual framework of the European System of Accounts (ESA-2010).

It should be noted that these data refer only to taxes which are revenue of the Regional Government of Madeira, the values being in national accounting and not in public accounting. Consequently, the values published by DREM and DROT will reveal differences for some taxes, which is explained by specific treatments carried out by INE in the context of this conversion from public accounting to national accounting.

It is important to note that the information currently available does not permit the calculation of the "tax burden", i.e. the sum of all taxes and social contributions effectively levied on taxpayers domiciled in the Autonomous Region of Madeira, as the scope of this analysis is limited to the Regional Government of Madeira (ARM), while there are taxes (and social contributions) paid by taxpayers residing in the Autonomous Region of Madeira which are revenue of the Central Government and also of the Local Government. Another case that prevents the accurate calculation of the "tax burden" is related to the Value Added Tax (VAT), as the revenue from this tax derives from the application of a formula, which does not correspond to the actual tax collection made in the Autonomous Region of Madeira.

In 2021, the tax revenue of the Region grew by 2.7%

According to preliminary data for 2021, the Region's tax revenue, assessed on national accounts, amounted to 874.9 million euros, +2.7% than in the previous year.

In 2021, the Individual Income Tax (IRS) was around 230.9 million euros, +1.7% than the previous year, representing 80.0% of total direct taxes (74.7% in the previous year) that are revenue of the Regional Government of Madeira. This increase, which occurs in a context of tax relief, is due to measures to protect employment, remuneration and the recovery of economic activity. By component, the good performance of " employed work income" and growth of the "business and professional income" and "Other Capital Income" should be highlighted.

Regarding the Corporate Income Tax (IRC), in 2021 its revenue did not exceed 56.3 million euros, registering a 25.6% decrease compared to 2020. Despite the growth of items related to property income, the fall in revenue from this tax is still an effect of the adverse economic conditions generated by the COVID-19 pandemic, also reflecting tax relief measures of IRC.

In the 2006-2021 period, the Value Added Tax (VAT) is the tax that generates most of the revenue of the Regional Government, representing 71.9% of indirect taxes in 2021 (72.9% in 2020) and corresponding to 421.7 million euros. In 2021, the VAT concerning the ARM increased by 5.5%, reflecting the growth of the economy, after a negative year in 2020 in economic terms, which also impacted this tax.

Among the remaining taxes, the tax on oil and energetic products (ISP) had a revenue of 59.8 million euros in 2021, growing by 12.0% over the previous year. In order of importance, the excise duties on tobacco (IT) came next, generating around 35.7 million euros, contradicting the general trend of the increase in tax revenue, as it fell by 5.3%. In turn, stamp taxes revenue (IS) reached 29.1 million euros in 2021, with its revenue rising by 32.1% compared to the previous year. As for the tax on alcohol and alcoholic beverages (IABA), it was around 7.7 million euros in the year in reference, +5.4% than in the previous year, while the tax on vehicles (ISV) grew by 28.5% compared to 2020, reaching, in 2021, around 6.1 million euros.

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