Portugal is set to raise €8 million an hour in tax revenue

Portuguese tax revenue is expected to reach a new high in 2027 despite income tax relief measures.

By Bruno G. Santos, in News, Wealth and Tax · 09 Oct 2026, 13:03 · 0 Comments

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The Portuguese government is set to achieve record tax revenue in 2027, according to the 2027 State Budget (OE2027). Forecasts indicate tax revenue will reach €70.67 billion, or €193.62 million per day and €8.07 million per hour.

The figures suggest an increase of €2.86 billion compared with the 2026 forecast, even though measures are in place to reduce the tax burden on taxpayers’ incomes.

According to information published by Correio da Manhã, the tax relief under personal income tax (IRS) amounts to €552 million, achieved through adjustments to tax bands, the specific allowance, and the minimum subsistence threshold. Overall, total tax revenue is expected to continue growing, in line with projected trends in employment and wages.

Accordingly, the 2027 State Budget proposal presented to the Assembly of the Republic on 8 October points to a 4.2 per cent increase in tax revenue in 2027.

Impact of VAT and Corporation Tax

VAT will drive much of the growth in tax revenue, with projected revenue of €30.28 billion. This represents an increase of €1.53 billion, or 5.3 per cent, compared with the 2026 forecast.

The Government attributes this trend to expected nominal growth in private consumption, which is expected to increase VAT collections.

On the other hand, the IRS is the second-largest source of tax revenue, even though it is subject to tax relief measures. Consequently, the State expects to receive €20.38 billion in IRS in 2027, which is €679 million more than in 2026.

Other taxes

In addition to VAT and the IRS, the Government also forecasts higher revenue from taxes on tobacco and petroleum products.

In this regard, the Tobacco Tax is expected to show the largest percentage rise, growing 8.1 per cent and reaching €1.86 billion in revenue in 2027.

The tax on petroleum products is also expected to generate more revenue for the State, mainly due to steadily rising fuel prices. The budget forecasts revenue from this tax at €3.8 billion, up 5.2 per cent from 2026.