Workers at seven major companies will start to notice a difference in their pay slips. Altice, BA Glass, EDP, Grupo Sousa, José de Mello, Salvador Caetano and Sugal will now show, using graphs, how much the State collects from the salaries paid by the company. The measure, which is intended to pressure the Government into reducing the tax burden, is being promoted by Business Roundtable Portugal (BRP), an association that represents 43 major national companies.
“We receive pay slips that only tell part of the story, they tell what we commonly call gross salary,” Pedro Ginjeira do Nascimento, secretary general of BRP Portugal, told Negócios. “But there is a very important component, which is the employer’s TSU (Single Social Tax), which is completely omitted from the pay slip and which, therefore, means that people, including many businesspeople and politicians in general, have no idea what the legal costs of employment are.”
The official notes that “42.3% is the average rate of these charges in Portugal, compared to 34.8% in the OECD, a very significant gap”. Portugal has “the eighth heaviest tax burden” among the 38 developed countries that are part of this international organization, highlights Pedro Ginjeira do Nascimento.
In the opinion of the BRP representative, this initiative “will contribute to restoring the truth of the facts and to the economic and financial literacy of the population as a whole”.
In addition to “including all components of the cost or value of work”, the objective is also to present the information “in a simpler, more intuitive, graphical way, which allows someone who does not have a degree in economics, taxation or law to understand exactly what they are receiving, how much was retained in the hands of the State and how much was paid by the employer”.
More companies will join
When asked why only seven of the 43 companies represented by BRP are moving forward with the measure, Pedro Ginjeira do Nascimento replied that they do not expect to obtain unanimity to launch initiatives: “As long as we believe it is important and we have a critical mass of companies interested in implementing certain initiatives for the good of the country, we will put them into practice”, said the person in charge of BRP, noting that 24 thousand workers are already covered.
“What we have are the seven business groups that have already managed to make all the changes, even from the point of view of accounting and technology, to make this possible and that are now starting”, explains Pedro Ginjeira do Nascimento, indicating that “there is a group of other associates that are in various earlier stages of this process”, and so he hopes “that this group of seven will gradually expand”.
“Three sins” of the State
According to Pedro Ginjeira do Nascimento, the State commits “three sins” in its relationship with taxpayers. First, he believes that the current tax system “disincentivizes success in companies and individuals” because, “in the name of progressivity”, it penalizes “those who make an effort, who take risks, who have the will and ambition to do more”.
He then considers it to be a “very expensive” system, which, in his opinion, will not change with the Government’s proposals. The IRS Jovem “does nothing for the economy as a whole”, unlike the reduction of the IRC, which “seems to do something”, although “it does not resolve the so-called progression, which was the first sin”. And, finally, the third “sin” of the tax system is the fact that it is “hypercomplex”.
We receive pay slips that only tell part of the story (…) Many businesspeople and politicians are not aware of the legal obligations of work. Pedro Ginjeira birth
Secretary General of the BRP
For now, the measure is adopted by companies that cover 24 thousand people.
The BRP represents 43 large companies, of which 36 are not yet moving forward with the change to receipts.
Source: www.jornaldenegocios.pt
