Government scraps VAT on list of ‘essential items’ // TAP returns to profit after years of losses
Portuguese news in English on Monday, March 27, 2023.
Government scraps VAT on list of ‘essential items’
In the latest effort to tackle the cost of living crisis, the government will scrap VAT on a group of “essential items” between April and October, Público reports. The measure, which follows a similar move in Spain, is expected to cost the state about €410 million and the government says it is being developed under the assumption of a commitment from producers and supermarkets to pass the savings on to customers. The list itself is still unknown but is said to include healthy food, much of which is already taxed at the reduced VAT (IVA) rate of 6%. According to Público, the list features 46 products, including bacalhau but not salmon, and the items won’t be available tax-free until the change passes through parliament, likely in the middle of next month. The right-wing Liberal Initiative party said the measure was helpful but came too late and wouldn’t solve the problem on its own, Público reports.
If introduced, the change brings the total bill for government-sponsored cost of living measures a little beyond €2 billion, Dinheiro Vivo reports. That figure includes €360 cheques for less wealthy families, a 1% salary bump in the public sector, an increase in the meal subsidy to €6 and housing support. But it still falls well short of the unpredicted €3.5 billion buffer added to government coffers thanks to the extra tax receipts collected due to inflation. At the same time, the Portuguese housing market finally shows signs of slowing, with the number of sales in the final quarter of 2022 down 16% from the same period the previous year, Dinheiro Vivo reports. But the total value of the market, at €31 billion in 2022, is still more than twice what it was six years ago, Público reports.
TAP returns to profit after years of losses
Portuguese flag carrier TAP is back in the black for the first time since 2017, Público reports. Days before the sacked CEO and chairman walk out the door, the company recorded a profit of €65.6 million for 2022, thanks in large part to a massive revenue jump, up 151% to roughly €3.5 billion, a company record. The company credited an increase in passengers and prices, as the world made its way out of the pandemic doldrums. The company, which is still running with 20% salary reductions for workers earning more than €1520 a month, also hired an extra 362 workers, Público reports. The government is preparing to kick off a reprivatisation process in the near future. But it’s not all good news for the airline, with a pilot strike planned over Easter unless the government ratifies an accord recently signed between various relevant groups, Público reports. Passengers were reminded they’d be eligible for compensation if the strike, planned for April 7–10, were to go ahead.
Students protest over fees
Former ministers and left-wing current MPs have signed a manifesto against reform to the way students pay for higher education, Público reports. The support came as students took to the streets on Friday, National Students’ Day, to call for an end to tuition fees. The government has gradually been reducing fees, reaching €697 a year in 2022 but a study it ordered from the Organisation for Economic Co-operation and Development calls for a different approach. The OECD wants the state to charge for university on a sliding scale based on family income, which opponents say would mean the state “definitively abdicating” its role in providing higher education as a public and generally free service. “Tuition fees are an obstacle to the democratisation of access to higher education", the manifesto reads. The controversy comes as students, living away from home, are increasingly feeling the crunch of the cost of living crisis, Público reports, with some even facing a choice between eating less or quitting.
In brief
Children told to dress as 'Gypsies' and 'Africans' for 'Intercultural' Carnaval in Santarém. One horrified mother who didn’t want her child to attend the multi-school event shared a photo showing multiple children wearing blackface, afro wigs and makeup imitating “oriental eyes. The event, which the local council posted about on Facebook and seemed to have organised, was described as “obviously racist”. (Diário de Notícias)
Juvenile gang violence falling. After fears of an increase last year, police data showed attempted homicides halved in the second half of 2022. (Público)
SEF validates 73,000 residency permits in a week. The new online system for regularising foreigners from Portuguese-speaking countries is up and running. Nine in 10 of the new residents are Brazilian. (Diário de Notícias)
On a lighter note
Plastic is all around us but we rarely think about it. It really is stunningly useful but so much of it is disposable and the environmental toll is enormous. These are some of the themes touched on in the newest exhibition coming to MAAT in Lisbon, Público reports. The curator explains we invented something incredible, but it’s hit such an extreme, we need to look for alternatives. And before you think “man, this lighter note is a bit of a bummer”, the exhibition finishes with a look at a hopeful future full of plastic alternatives.