The burden of taxes in Portugal has returned to the center of the debate and, although the topic is not new, there is a recent warning that is gaining strength and that could have a direct impact on the disposable income of thousands of workers, especially those with lower salaries.
According to the Organization for Economic Cooperation and Development (OECD), the Portuguese tax system remains excessively dependent on labor taxes, which means that those who earn less may be bearing a proportionally high tax burden. This dependence creates distortions in the system and raises questions about how fiscal effort is distributed, at a time when the country faces structural challenges in terms of productivity and economic growth.
The problem is not where many think
Although Portugal has a historically low unemployment rate, the OECD considers that the labor market continues to have important weaknesses, and this is also reflected in the way taxes are levied on income.
The report “” points out that the country continues to have an economic performance below that of other more advanced economies, and one of the factors identified is precisely the tax burden on labor, which especially penalizes lower incomes.
At the same time, the organization highlights that property taxes remain relatively low compared to other countries, which contributes to an imbalance in the tax structure.
The proposal involves changing the focus of taxes
Given this scenario, the OECD recommends a reconfiguration of the tax system, and although it is not an immediate measure, the objective is to alleviate the burden on lower-paid workers and compensate for this reduction through other sources of income.
Among the suggestions presented is the increase in property taxation and the elimination of tax benefits considered ineffective, which currently represent significant losses of revenue for the State. This strategy would reduce labor costs and, at the same time, make the system simpler and more transparent, which could have positive effects on the competitiveness of the economy.
Young people, women and older workers at the center of concerns
In addition to the tax issue, the OECD report draws attention to the need to improve participation in the labor market, especially among young people, women and older workers, groups where there is still room for evolution.
The organization argues that strengthening training policies, access to child support services and creating incentives to remain in the job market can contribute to increasing productivity and mitigating skills shortages. At the same time, it suggests a review of the balance between permanent and temporary contracts, in order to promote greater job stability and reduce precariousness.
Housing and productivity also enter the debate
Another of the points highlighted is related to access to housing, which continues to be one of the main obstacles to labor mobility and the retention of workers, especially among younger people. The OECD identifies a significant increase in house prices and rents, which makes it difficult to purchase or rent suitable housing, and proposes measures such as simplifying licensing processes and strengthening the supply of social housing.
Furthermore, it recommends a greater focus on public investment, particularly in the energy area, where Portugal remains below the organization’s average, in a context marked by increasing risks associated with climate change.
An alert that can influence future decisions
Although the OECD recommendations are not binding, they end up serving as a reference for defining public policies and for the political debate around structural reforms. In the case of taxation, the possibility of easing the burden on lower salaries appears as one of the most relevant proposals, especially at a time when the cost of living remains high and pressure on income remains.
This warning reinforces the need to rethink the Portuguese tax model, and although there is still no concrete decision, the topic should continue to be on the agenda in the coming months.
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