Economist Luís Aguiar-Conraria, economic advisor to the President of the Republic, advised this Tuesday the Liberal Initiative to seek points of convergence with António José Seguro, considering that the liberals, being a small party, need allies. In a debate on tax reform on the second day of IL's parliamentary retreat in Porto, Aguiar-Conraria considered that the party may have presidential support for its proposals aimed at favoring growth and business concentration, noting that promoting business concentration was part of Seguro's platform during the presidential campaign.
The economist refuted the idea that Portuguese taxation is particularly high, arguing that it is below the OECD average. He stated that the major flaw of the Portuguese tax system is that it is stupidly complex, considering it necessary to eliminate rates and small taxes, reduce the progressivity of taxes, and arguing that taxes on profits harm economic growth. He warned, however, about the political difficulty of implementing these changes due to what he considered easy populisms on the left and also on the right, with Chega.
Aguiar-Conraria also criticized Chega's proposal to reduce fuel VAT, considering it would be another stupidity because it would create another differentiated VAT rate. He stressed that if the level of taxes on gasoline is high, the ISP, which is the specific tax on fuels, should be lowered, not VAT.
Economist Pedro Brinca focused on state efficiency, stating he is convinced it was possible to do twice as much with half the resources in the civil service. He defended ending the state surcharge for penalizing business growth and criticized zero VAT on the food basket, warning that the tax reduction could be absorbed by distribution and not reflected in the final price, ultimately helping businesses that do not need it. Brinca also mentioned having recently been invited by the prime minister to a breakfast with economists, which he classified as the most depressing thing in his life.
