The international think tank "Tax Competitiveness Index 2023", reveals that in 2020, Portugal compared to the other EU Member State countries, came in 13th place in terms of tax burden, with 37.6 percent of GP going on tax in comparison to the European Union average tax to GDP rate of 41.3 percent.

However, Portugal rose to the sixth highest position of all the 27 Member States in terms of tax effort (+17 above the European Average), an indicator used to evaluate the incidence of government revenue in the production of society, measuring the relationship between the percentage of public revenue with respect to gross domestic product (GDP) and per capita income. Only Greece (+63 percent), Poland (29 percent), Croatia (+24 percent), Bulgaria (+20 percent) and Hungary (+19 percent) registered a worse tax effort than Portugal.

Between 2019 and 2022, the tax burden rose from 34.5 percent to 36.4 percent of GDP in Portugal, and the tax effort increased from 109.7 percent to 116.8 percent, with tax revenues being boosted by the effects of inflation, yet the State did nothing significant to offset this increase by alleviating taxes for the general population or business regarding these circumstantial windfalls.

Reflecting on these 20 years as a whole, it is evident that Portugal, despite having reduced its tax effort, has lost ground when it comes to the average European tax effort, mostly to convergence and Eastern European countries.

"A country's ability to reduce its tax level is crucial for its overseas economic competitiveness and its ability to attract investment and capital, so to compete on the European and International stage, Portugal will have to lower its tax effort and burden, demanding less from its citizens and companies so that both can save and invest", states the report.