Portugal hopes to boost revenues with tax lottery

The Portuguese tax authorities will begin holding weekly lotteries in April for consumers who ask for their tax numbers to be printed on their receipts.

The authorities hope that the chance to win luxury goods including ‘top-range automobiles’ will encourage citizens to play their part in combating Portugal’s black economy and tax evasion which is estimated to account for one fifth of the country’s national output.

By asking for their tax number to be printed on their receipts from cafés, hairdressers, car mechanics and other businesses, it is hoped that consumers will force an increase of 50% in the number of transactions business owners report to the authorities.

The ‘cars for tax data’ scheme has been announced to boost revenues as the country faces ambitions deficit targets set under a €78bn international bailout agreement.

The secretary of state for fiscal affairs, Paulo Nuncio believes that the cost to the taxpayer of buying the cars (estimated to be around €90,000) will be far outweighed by the increased tax revenue from previously undeclared earnings.

The scheme has proved somewhat controversial however and has been greeted with objections relating to pollution, national pride and the belief that turning citizens into tax inspectors does not benefit a modern European democracy.

Small business owners also estimate the registering a tax number for every customer for even small transactions such as buying a cup of coffee could occupy 130m working hours, leading to a fall in productivity that the country can’t afford.

The national association representing café and restaurant owners are calling for a minimum spending level of €5 below which receipts wouldn’t be necessary.

The scheme which drew inspiration from a similar tax lottery in Brazil, is designed to appeal to Portugal’s love of gaming.  The nation is already one of the highest spenders per capita on the EuroMillions draw.

Some commentators such as tax advisor John Duggan remain sceptical however, believing that consumers would rather opt out of asking for a receipt if they receive discounted goods and services without VAT.  As he points out, ‘They’d be able to buy a lot of ordinary lottery tickets with the money they save.’

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