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The fiscal burden will get lighter in Gaia

Taxes will get reduced in order to help local economy forge ahead in tough times

  • 2020. október 21., szerda, 20:30
  • Author Tzvetozar Vincent Iolov
Medium vila nova de gaia
Forrás: Port Houses of Vila Nova de Gaia by David Baxendale, on Flickr (CC BY-ND 2.0)

Yesterday, 20 October, the municipal website of the Vila Nova de Gaia announced that the Municipality has formalized the reduction of three different taxes levied locally in order to stimulate economic activity in the predicted recession times. The taxes in question are the Municipal Property Tax (IM), Personal Income Tax (IRS) and the so-called Derrama (‘Spill’) tax – this being the first time in municipal history that the last two will be decreased.

The new fiscal policy will be applied in 2021

More specifically speaking, the Municipal Property Tax will become 0.38%, down from this year’s 0.4% which in effective terms means that for every 400 euros, 20 euros will be saved. The Personal Income Tax will be reduced from this year’s 5% to 4% next year.

As for the Derrama tax, a levy that is applied on the profit of companies doing business on the territory of the municipality, the rate was set at 1.25% for those enterprises that have a sales turnover of more than 150 000 euros. In 2020, that rate was 1.5%.

For smaller businesses, with less than 150 000 euros turnover, the rate will go down from 1.25% to 1%. Newcoming companies that decide to establish their headquarters in Vila Nova de Gaia will be completely exempt of this tax for one year, provided they create and maintain a minimum of 5 jobs there.

"For the first time in the history of Gaia, we are going to reduce the Derrama and the share of the IRS. Right now there is a group of people, which includes middle and lower-middle classes, as well as companies, suffering from this unusual period. As for the reduction in IMI, this is not about Covid. It is the fulfilment of a previous commitment for our mandate," said Eduardo Vítor Rodrigues, the Mayor of Gaia.

The mayor also informed that the fiscal reduction would lead to some 9.5 million euros less for the municipal coffers next year.

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