DREM updates the time series of Tax Revenue Statistics for 2022

The Regional Directorate of Statistics of Madeira (DREM) updates today the time series of "Tax Revenue Statistics" with reference to the period 2006-2022, with information for the years 2021 and 2022 still being provisional and preliminary, respectively.

This time series was compiled by Statistics Portugal (INE) as part of the preparation of the national "Tax Revenue Statistics", 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 2022, the tax revenue of the Region grew by 15.8%

According to preliminary data for 2022, the Region's tax revenue, assessed on national accounts, amounted to 1,013.1 million euros, +15.8% than in the previous year.

In 2022, the Personal Income Tax (IRS) was around 258.9 million euros, up by +12.1% over the previous year, representing 70.9% of the total direct taxes (80.0% in the previous year) that are revenue of the Regional Government of Madeira. All components of the personal income tax (IRS) contributed to this increase, with the most important component, the revenue on the income of employees, growing by 5.8%, in line with the growth in the level of employment (+3.7%, according to the Employment Survey) and the rise of the average remuneration per worker (+3.1% in the Region). According to data on tax collection from the Tax and Customs Authority, the increase in revenue from business and professional income (+22.5%) and from property income (+20.9%) is also noteworthy.

In the case of the corporate income tax (IRC), income from this tax reached 104.4 million euros in 2022, an increase of 85.4% compared to 2021, reflecting the improved economic situation. By component, it may be observed that the increase in corporate income tax revenue resulted from the growth of reverse charge tax assessments (amount payable following the submission of the corporate income tax return), payments on account (which depend on the corporate income tax paid in the previous year) and other income and property income.

In the 2006-2022 period, the Value Added Tax (VAT) is the tax that generates most of the revenue of the Regional Government, representing 76.0% of indirect taxes in 2022 (71.9% in 2021) and corresponding to 492.8 million euros. In 2022, the VAT concerning the ARM increased by 16.9%, reflecting the growth of economic activity.

Among the remaining taxes, the tax on oil and energy products (ISP) had a revenue of 42.8 million euros in 2022, down by 28.5% compared to the previous year. This decrease is explained by government measures to reduce the ISP rate in order to offset the rise in fuel prices. In order of magnitude, the tax on tobacco (IT) came next, which was around 36.7 million euros, a growth of 2.8%. In turn, stamp duty (IS) reached 32.6 million euros in 2022, with its revenue increasing by 11.9% compared to the previous year. As for the tax on alcohol and alcoholic beverages (IABA), it was around 9.8 million euros in the year in question, +28.0% compared to the previous year, while the tax on vehicles (ISV) decreased by 10.0% compared to 2021, reaching around 5.5 million euros in 2022.

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