Tourist Tax Latest Attempt at Saving Portugal’s Failing Economy


Lisbon, the capital city of Portugal, would suffer greatly from decreased tourism revenue.

Tax revenues in Portugal are expected to reach 30% by the end of 2013, which could be a nightmare for tourists all around the world.

Portugal, currently dealing with the Eurozone crisis, has massive problems with tax revenues. The population will receive a 30% tax revenue by the end of 2013. This large percentage makes Portugal’s tax burden higher than the U.K. France, Spain, Germany, and Italy. “Portugal’s economic recovery cannot be sustained if the burden of taxation remains as high as it is at present,” said the economy minister, António Pires de Lima, according to The Portugal News.

In June, thousands of Portuguese workers went on strike, amassing on the steps of parliament in Lisbon and singing nationalist songs. Bruno Cabral, a young filmmaker who also participated in the protests, blamed the country’s high unemployment, which is at 42 percent for those under 25. “I think we cannot build any future for the country if we don’t invest in culture, education, science,” he said, as reported by DW News.

Tourists are in shock, too.  By September 2010, Lisbon’s Mayor António Costa announced that his administration was considering introducing a two-tiered tourist tax.  Lisbon is, after Barcelona, the European city attracting most tourists, with 7 million tourists in 2006, the number grew 11.8% compared to previous years. This high amount of tourists is supposed to bring money into the country.

Although this is a good idea it could easily backfire. Tourists could completely stop visiting Portugal, which would bring the country into a higher debt bracket.

In 2011, Portugal couldn’t hold itself financially in the market and received 78 billion euros (101 billion dollars) in bailout. The prime ministers have already warned Portuguese citizens to be ready for new sacrifices, to hopefully avoid having another bailout. If there were to be another bailout for Portugal, it would most likely be the last one.