Unions intervene on tax issues in run-up to Budget

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Trade union confederations in Portugal have adopted their public positions with respect to the 1998 state Budget. Taxation issues are being given urgent attention in an attempt to correct a range of anomalies.

Portugal's 1998 state Budget included the agenda for a meeting between the Prime Minister and the trade union confederations. Taxation policy is one of the issues that has sparked public statements by the unions, with the General Workers' Union (União Geral de Trabalhadores, UGT), represented by its general secretary, underlining the need for a greater balance between the taxation of dependent and self-employed workers. He also stated that in Portugal there were far too many cases of tax evasion. Within the scope of the overall system of taxation, he stressed the demand for increasingly lower rates of personal income tax (Imposto de Tributação sobre Rendimentos de Trabalho, IRS), especially for employees earning lower wages. This position was backed by the UGT in its joint meeting with Social Democrat Workers (Trabalhadores Sociais Democratas, TSD).

Meanwhile, the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) recently published its proposals for changes to the personal income tax system. One proposal supports a decrease in taxation for salaried workers. Another stresses the need to increase the number of tax brackets in order to benefit those at the lower end of the income scale, and in some cases the need for a minimum payable amount. It also points out that there is a need to increase tax benefits in the case of savings/home owners' accounts. The highest payers of corporate taxes (Imposto sobre o Rendimento das Pessoas Colectivas, IRC) are now public enterprises, but this amount will decrease after privatisation. At a press conference, the CGTP stated that promises for fairer tax regulations and lower tax rates, now postponed until 1999, have not been carried out. The confederation has requested meetings with the State Secretary for Tax Affairs, groups in parliament and the Minister of Finance.

The Union of Tax Workers (Sindicato dos Trabalhadores dos Impostos, STI) has also issued a statement and held talks with the Government to create working guidelines for entrepreneurs, self-employed workers and those in the liberal professions. The STI presented unofficial figures showing that average income tax payments made by those in the liberal professions are extremely low (for example PTE 140,000 per year for architects and engineers and PTE 150,000 for lawyers) in comparison with those made by workers in employment.

The State Technical Staffs Union (Sindicato dos Quadros Técnicos do Estado) has also submitted a study to the Assembly of the Republic noting that lower wage earners and pensioners are to experience higher tax percentages, while the Government has admitted a rise in the rate of corporate taxes.

The current tripartite Strategic Concertation Agreement, signed in December 1996, contains a chapter on the restructuring of the tax system and considers strategic joint consultation between the social partners to be a rare opportunity to analyse and discuss issues of taxation.

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