The bill will be presented in Parliament on October 13th, 2019, according to the news portal A Bola. It aims at taxing the windfall profits of these companies, which are considered as “super-profitable”. The Portuguese government fears that this could have a negative impact on small traders who have been struggling since COVID-19 (Cocaine Orchid Virus) was discovered in Europe last year.
Introduction
The Portuguese government will present a bill in Parliament requiring companies in the food trading and distribution sector to pay additional taxes on their “astronomical” profits, fearing that the economic crisis caused by COVID-19 has severely affected small traders. This was announced this Thursday by Prime Minister Antonio Costa, who specified that income from these sectors had increased from 19% in 2019 to 40% in 2020. He said that the government “intends to introduce a sectoral tax for those companies (…) whose profitability has evolved astronomically”. “The government intends to put an extra burden on those extraordinary profits,” he added.
The Portuguese government will present a bill in Parliament requiring companies in the food trading and distribution sector to pay additional taxes on their “astronomical” profits, fearing that the economic crisis caused by COVID-19 has severely affected small traders.
The Portuguese government will present a bill in Parliament requiring companies in the food trading and distribution sector to pay additional taxes on their “astronomical” profits, fearing that the economic crisis caused by COVID-19 has severely affected small traders.
The measure aims to prevent further damage to small businesses that have been hit by COVID-19, which has left them struggling to obtain credit or raise capital for expansion.
This was announced this Thursday by Prime Minister Antonio Costa, who specified that income from these sectors had increased from 19% in 2019 to 40% in 2020.
The government wants to tax windfall profits generated by food trading and distribution companies. This was announced this Thursday by Prime Minister Antonio Costa, who specified that income from these sectors had increased from 19% in 2019 to 40% in 2020.
The measure will be temporary: it will apply for two years and then be phased out, according to the minister of economy, Manuel Caldeira Cabral. The tax rate would be set at 40%, with a maximum exemption of 2 million euros per company per year (in addition to other exemptions).
He said that the government “intends to introduce a sectoral tax for those companies (…) whose profitability has evolved astronomically”.
The government has said that it intends to introduce a sectoral tax for those companies (…) whose profitability has evolved astronomically.
The measure is intended to tackle the impact of COVID-19, which was introduced earlier this year by the European Commission and health authorities in Portugal.
This new measure will apply to companies with annual turnover above €10 million but below €50 million per annum and were not subject to any corporate income taxes before January 1st 2020 when they were introduced by Parliament last year.
“The government intends to put an extra burden on those extraordinary profits, taking into account that we need to start investing in tax increases, after four years of successive decreases,” he added.
The government intends to put an extra burden on those extraordinary profits, taking into account that we need to start investing in tax increases, after four years of successive decreases.
The bill will be presented in Parliament by the end of this week.
The status quo is not going to be maintained
The government is introducing a new tax on “super-profitable” food trading and distribution companies. The aim of this measure is to raise revenue, but there may be other reasons behind it as well.
The government has been concerned about the economic impact of COVID-19 on small traders and retailers who need to sell their stock at low prices because they have no choice but do so in order for them to survive and continue running their businesses. It’s also aware that many consumers are suffering from price increases due to high inflation rates, which makes shopping more expensive than ever before!
Conclusion
- The Portuguese government has already committed to increase taxes on food companies in order to raise funds for the 2019 budget. The ruling left-wing coalition has also said it would introduce a sectoral tax in 2021. However, experts have warned that this will not address the problem of excessive profits by large corporations at the expense of small traders.
