Nuno Félix warns against tax benefits as easy solutions

Former Secretary of State for Tax Affairs, Nuno Félix, testified before a parliamentary working group that creating tax benefits is an “easy temptation” to address socio-economic issues. Speaking to the Committee on Budget, Finance, and Public Administration (COFAP), Félix warned that while tax incentives can sometimes drive economic growth, they often result in a “true loss of revenue” and create significant bureaucracy and complexity for citizens, companies, and the public administration.

Félix noted a common perception that tax benefits allow problems to be solved without requiring direct budgetary allocation or funding, but characterized this view as an “illusion.” He emphasized the need to consider the global competitiveness of the fiscal system, particularly regarding Corporate Income Tax (IRC).

During the same hearing, former Secretaries of State Carlos Lobo and Sérgio Vasques shared similar views regarding the perception of tax incentives. Carlos Lobo specifically noted that tax benefits are not the solution to the housing crisis.