Portugal Launches Tax Lottery
February 11, 2014 Taxation in Portugal
LISBON – Taxpayers in Portugal are now being offered rewards of cash and luxury cars in exchange for meeting their everyday tax obligations.
Late last week the Minister to the Presidency and Parliamentary Affairs of Portugal Luis Marques Guedes announced that starting from April this year the government will run a new lottery aimed at discouraging off-the-record cash sales and business transactions.
Under the rules of the new lottery, dubbed the Factura da Sorte or Lucky Invoice, all purchases made through a cash register in a retail store or with a properly issued invoice by other small service providers will be allocated with a lottery number for individual buyers, to be drawn for a weekly prize.
The government hopes that the incentive will discourage taxpayers and businesses from transacting sales in cash with no record being kept in order to avoid the country’s VAT, currently set at a rate 23 percent.
It is estimated that the lottery may lead to the collection by the Portuguese tax authorities of extra tax revenues of up to EUR 800 million per year.
To increase the attractiveness of the lottery from the very beginning the tax authorities are offering as prizes large cash sums and high-end automobiles, which are estimated to be worth in excess of EUR 90 000 each.
The innovation has already led to widespread debate in the local media of Portugal, with some experts claiming that offering foreign cars in a government run lottery is an offense to the country’s national pride, and will raise pollution and harm the ecological balance in the country.
Photo by: Jinx!