Portugal fiscal policy and tax inequality

Discussions regarding Portugal’s fiscal landscape have focused on tax inequality and the concentration of revenue. Concerns have been raised regarding the non-habitual resident tax regime, which reportedly created significant fiscal inequality with estimated tax expenditures of 1,741 million euros in 2024. Critics have linked this regime to increased housing pressure in urban centers, noting that while the regime was revoked, successor benefits remain.

A study by the Fundação Francisco Manuel dos Santos further highlighted structural issues in the tax system. The report found that a small group of taxpayers contributes a disproportionate amount of personal income tax revenue: households earning over 50,000 euros accounted for 7.6% of declarations but contributed 56% of the total collected in 2024. The study also noted that hundreds of tax benefits exist and that judicial processes for final tax decisions can exceed ten years. Additionally, researchers suggested that tax progressivity might be overestimated because capital income is often not recorded in standard declarations.