Manuel de Almeida / LUSA
Miranda Sarmento, Minister of Finance
Miranda Sarmento says that, in VAT drops on goods whose prices are not regulated, part of the drop is captured by those who produce and distribute.
The Minister of Finance moved away in parliament a fall in VAT on food goodsjustifying that the reduction would be absorbed by the production and distribution chain, and that it would not be felt by consumers.
“It is relatively consensual in the economic literature that VAT drops on goods whose prices are not regulated, such as food, [levam a que] a part of this descent [seja] captured by those who produce and distribute”said Joaquim Miranda Sarmento during a hearing at the Budget, Finance and Public Administration Commission (COFAP).
The question of relief was raised by Chega deputy Eduardo Teixeira, to whom Miranda Sarmento responded that if the parliamentarian thinks that the resources arising from a reduction in consumption tax “should be channeled to this function and not to consumers, that is Chega’s decision”.
The justification presented by Miranda Sarmento in the Assembly of the Republic comes after, on March 27, the Prime Minister stated that “no intervention in terms of VAT is on the table”, neither in fuel nor in the food basket.
At the same hearing, Miranda Sarmento also rejected that the State is gaining tax revenue from VAT in the wake of rising diesel and gasoline prices, highlighting that taxpayers are benefiting from the discount on the tax on petroleum and energy products (ISP).
“In fuels, the State is not making money in VATbecause the price increase results in greater ICMS collection, but this revenue is being deducted from the ISP value. This discount of almost ten cents on diesel and almost five cents on gasoline is exactly the additional VAT from the price increase that is reduced by the ISP”, he said, remembering that this mechanism had also already been applied in 2022 by the government of António Costa (PS).
In relation to the data released by the National Statistics Institute (INE), which shows that the inflation increased to 2,7% in March, said that “they are clear”, by showing that the worsening results from the rise in fuel prices.
