In the process of tax policy reform, the Government of Portugal has appointed an inter-ministerial expert commission with the mandate of drafting a proposal for green taxation. The commission, which is composed of ten experts will submit its proposals by the end of June, opening public discussion afterwards. The final document will be ready by September 2014. Its work will be based on the principle of “fiscal neutrality”, and will pursue the reduction of taxation on labour, by transferring the tax burden on activities of high ecological footprint.
This initiative by the Portuguese Government builds on the findings of a report published in August 2013 by the European Environment Agency. According to the report, “Portugal had the highest share of environmental taxes as a percentage of GDP of any Member State in the late 1990s. By using environmental tax approaches currently implemented in other EU Member States, Portugal could revert to this level, raising additional revenue of €3 billion. [….] Opportunities for Portugal include taxing diesel and petrol cars equally, and bringing in new taxes on a variety of goods including drinks packaging, shopping bags and pesticides. Further revenue raisers could include air travel taxes, an air pollution charge for heavy-goods vehicles and a royalty for old hydropower and other natural resources.”
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