Portugal study reveals high concentration of income tax revenue

A study titled ‘Portugal Fiscal’, published by the Fundação Francisco Manuel dos Santos, shows that a small group of taxpayers accounts for a majority of personal income tax (IRS) revenue in Portugal. In 2024, households declaring annual gross incomes exceeding 50,000 euros represented only 7.6% of the total but contributed 56% of the IRS collected.

The report, authored by Sérgio Vasques, Susana Peralta, and José Pedro Sousa, also highlights structural issues within the tax system, including hundreds of tax benefits and a judicial process where final tax decisions can take over ten years. The authors noted that the observed progressivity might be overestimated because capital income, such as interest and dividends subject to flat rates, is often not recorded in standard declarations.