Portugal Economy Minister warns against VAT reduction

Portuguese Minister of Economy and Territorial Cohesion, Manuel Castro Almeida, has expressed skepticism regarding the reduction of Value Added Tax (VAT) as a tool to combat rising prices. During a parliamentary hearing, the minister argued that such a measure is controversial and carries a significant risk of increasing revenues for the retail sector rather than reducing costs for households.

Castro Almeida noted that a VAT reduction might disproportionately benefit wealthier classes who consume more, potentially leaving the government without financial instruments to assist those most in need. He stated he is not convinced this is an appropriate way to address price increases.

Regarding the possibility of fixing profit margins, the minister described it as a delicate matter. He argued that such intervention should only be considered under exceptional circumstances, specifically in cases of an abuse of dominant market positions by companies.