DREM updates the time series of Tax Revenue Statistics with data for 2024

The Regional Directorate of Statistics of Madeira (DREM) has today updated the time series data on “Tax Revenue Statistics” with reference to the period 2006–2024. It should be noted that data for 2023 are provisional, while those for 2024 are preliminary.

This series was compiled by Statistics Portugal (INE) as part of the preparation of national Tax Revenue Statistics and is based primarily on data 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 for the purposes of the Excessive Deficit Procedure). These data were complemented by other information collected by INE from the Central Administration. The figures are based on the 2021 benchmark of the Portuguese National Accounts, in accordance with the conceptual framework of the European System of Accounts (ESA 2010).

It is important to note that these data refer exclusively to taxes that constitute revenue for the Regional Government of Madeira and are presented in national accounting terms rather than public accounting terms. Consequently, the figures published by DREM and those by DROT will reveal divergences for certain taxes. These discrepancies are justified by specific adjustments made by Statistics Portugal during the transition from public accounts to national accounts.

It should also be stressed that the data now released do not allow for the calculation of the "tax burden", i.e. the sum of all taxes and effective social contributions levied on taxpayers with tax residence in the Autonomous Region of Madeira. This limitation arises because the scope of the analysis is restricted to the Regional Government of Madeira (RGM). Taxes (and social contributions) paid by residents in the Region that constitute revenue for Central or Local Government are not included. A further factor hindering the accurate calculation of the "tax burden" relates to Value Added Tax (VAT), as the regional revenue from this tax is determined using a formula, and not based on actual VAT collected in the Region.

In addition to DROT, DREM extends its thanks to the Regional Tax and Customs Authority of Madeira (AT-RAM) and the Customs Office of Funchal for the information provided, which has enabled a more detailed analysis of each tax's performance.

In 2024, the tax revenue in the Region grew by 9.2%

According to preliminary data for 2024, the tax revenue in the Region—in national accounts—amounted to 1 318.7 million euros, representing an increase of 9.2% compared with the previous year.

In 2024, Personal Income Tax (IRS) amounted to approximately 263.6 million euros, a decline of 3.2% compared to the previous year. IRS accounted for 51.6% of total direct taxes (55.6% in the previous year) collected by the RGM. Most IRS components contributed to this decline, primarily due to tax relief measures that resulted in lower withholdings and higher disposable income, namely the implementation of the compensation mechanism for withholdings already made in 2024 on income earned between January and August. This decrease was mitigated by economic growth in 2024, as reflected in DREM’s Regional Indicator of Economic Activity (RIEA), which indicated increases in employment (+3.6%, according to the Labour Force Survey) and in average earnings per employee (+6.3%). According to data from the Tax and Customs Authority, the sharpest declines were recorded in revenue from withholding on employment income (-9.7%), pensions (-9.2%), and business and professional income (-2.8%). Positive contributions to IRS came from other types of capital income (+4.5%) and from collection notices (+6.4%). Considering the total Public Administration in the country, IRS revenue decreased by 4.6%.

As for Corporate Income Tax (IRC), revenue in 2024 totalled 245.8 million euros, representing an increase of 13.8% compared to 2023. This reflects, on the one hand, the favourable economic conditions experienced in the Region during 2024 and, on the other, the recovery of State aid granted under the Madeira International Business Centre (IBC). The increase in IRC revenue stemmed from higher collection notices (linked to the aforementioned IBC process) and from advance payments (which depend on IRC paid in the previous year). However, the reverse-charge mechanism (amounts due following submission of the IRC tax return – Model 22) showed a declining trend. At the national level, IRC revenue rose by 19.6%.

Between 2006 and 2024, Value Added Tax (VAT) consistently generated the highest amount of revenue for the Regional Government. In 2024, VAT represented 77.6% of indirect taxes (76.7% in 2023), corresponding to 626.7 million euros. VAT revenue for the ARM increased by 14.0%, reflecting economic growth at the national level, since VAT is allocated to the Region based on a per capita formula. However, it is worth noting that 2024 figures were positively impacted by adjustments related to the previous year. Nationally, VAT revenue grew by 9.1%.

Among the remaining taxes, particular note goes to the tax on oil and energy products (ISP), which generated 42.1 million euros in revenue in 2024, representing a 4.2% increase compared with the previous year. The tobacco tax (IT) amounted to approximately 47.1 million euros, reflecting a growth of 12.2%. The stamp duty (IS) reached 38.6 million euros in 2024, with revenue increasing by 14.2%. As for the tax on alcohol and alcoholic beverages (IABA), it stood at around 12.2 million euros in the year under review, a rise of 22.5% compared to the previous year. Conversely, the vehicle tax (ISV) decreased by 2.3% compared with 2023, amounting to approximately 7.1 million euros in 2024.

For further information, please consult:

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