"We cannot tax what we do not have", says Carlos Lobo

In Portugal, unlike most European Union (EU) countries, tax revenue on capital (shares, for example) has fallen over the last 20 years , while tax revenue on labour has increased. This is the conclusion reached by the European Commission in its recently published quarterly report on the Eurozone. Carlos Lobo, former Secretary of State for Tax Affairs, argues that the problem lies elsewhere.

" There is no reduction in taxation on capital. What exists is an exhaustion of taxation on the capital that is taxed , which is basically real estate.

And as a result, we had a reform in 2003, which was of the IMI and IMT, then we had the insertion of the IMI, of the additional IMI in 2016, and we were effectively left with this tax base a little exhausted", he explains in an interview with Negócios on the NOW channel.

Ultimately, he adds, the problem of there being no or low taxation on capital "is because Portugal has little capital, that is, in practice, the tax base is reduced, we cannot effectively tax what we do not have . And what we do have is basically real estate".

Carlos Lobo also stresses that if Portugal wants to tax other forms of capital other than real estate, it will face other problems, given the asymmetries that exist in the taxation system at a global or European level. " What happens to mobile capital if it is taxed excessively? It moves to locations where it is taxed less . And since there is no effective harmonization of the taxation of mobile capital at a global or even European level, any State is prevented from taking great risks in this regard," he explains.