DREM releases income statistics for the 2015-2017 period based on the Personal Income Tax (IRS) return

The Regional Directorate of Statistics of Madeira (DREM) releases, for the first time, a set of regional information based on anonymised fiscal data from the Portuguese Tax and Customs Authority (AT). These data is related with the settlement note of Personal Income Tax (IRS - Modelo 3), obtained under an agreement between Statistics Portugal (INE) and AT. The information refers to the 2015-2017 period and is broken down by municipality.

In this study - which will be updated annually by DREM - several indicators related to the gross reported income (per se or excluding the tax paid) are released, by tax household or taxable person and also some variables that allow to assess income inequality (S80/S20 ratio and Gini coefficient).

Median value of gross reported income minus income tax paid by taxable person in the Region and country is similar

In 2017, 112,219 tax households and 156,537 taxable persons were recorded in the Region. Both variables grew in 2016 and 2017.

In the same year, the gross reported income in the Autonomous Region of Madeira (ARM) was around 1,885 million euros, while the gross reported income minus income tax paid amounted to 1,675 million euros, showing an average annual growth rate between 2015 and 2017 of 3.0% (2.7% in the country).

In 2017, the average gross reported income minus income tax paid by taxable person was € 10,701, while the median was € 8,673. At the national level the average was 10 954 €, while the median was only 14 euros higher than the regional average (8 687 €).

In the context of the 7 NUTS2  regions, the Autonomous Region of Madeira is behind A.M. Lisbon, the region with the highest median (10 397 €), which stands out quite apart from the other regions while Norte has the lowest median (€ 8,049). Between ARM (2nd region, with 8 673 €) and Algarve (6th region, with 8 481 €) the medians are relatively close.

Main indicators of income inequality in the Region are similar to the country’s

The S80/S20 ratio, which corresponds to the ratio between the total income of the 20% with the highest income and the income earned by the 20% with the lowest income, stands at 3.1, meaning the income of the richest 20% is 3.1 times higher than that of the poorest 20%. The national average is 3.0, and by region, A.R. Azores has the highest ratio (3.2), followed by the A.M. ​​Lisbon and ARM (3.1). The region with the lowest inequality according to this indicator is Alentejo (2.6).

The Gini coefficient is also an indicator of inequality in income distribution, which aims to summarize the asymmetry of this distribution in a single value. It varies ​​between 0% (when all taxable persons have the same income) and 100% (when all income is concentrated in a single taxable person).

In 2017, the regional Gini coefficient of gross reported income minus income tax paid by taxable person was 26.7%, the same as in the country. By region, Alentejo (23.9%) and Centro (24.8%) had the lowest Gini coefficients, while AR Azores (28.1%) and A.M. Lisbon (27.7%) showed the highest values. ARM was the 3rd region with the highest Gini coefficient.

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