Government to Give Out Cars to Combat Tax Evasion in Portugal
Are you a law-abiding, tax-paying citizen of Portugal? Great, you get a new car. (Is Oprah the president of Portugal? Most likely.)
Okay, so it doesn’t actually work like that, but tax evasion in Portugal has evidently become such a problem that the federal government is going to be giving away up to 60 cars a year in a lottery system for people who pay their sales taxes.
Whereas here in the States, it’s much less common to pay someone “under the table” these days, especially with credit and debit cards being so handy and overused, in Portugal it is quite ordinary to be on a friendly, first-name basis with merchants, who in turn give their customers the best deal, sans receipt (and sans sales tax).
While it doesn’t sound like a big deal, the Portuguese government is expecting a €600 to 800 million increase in tax revenues from this new system. (That’s between 824,580,000 and 1,099,440,000 U.S. dollars—thanks Google.) When you’re dealing with over $1 billion lost each year, a few tens of cars given away isn’t so much of a financial burden.
So here’s how this thing works. During transactions of more than three Euros, customers can opt to give their Tax ID number to the merchant; the merchant, in turn, must give them a receipt and a coupon proportional to what the consumer spent. (The bigger the purchase, the bigger the coupon.) Consumers will also get these coupons for items such as utility bills. These coupons then act as lottery tickets that will be drawn on television on a weekly basis (and even more on special occasions, like when Oprah’s in town). The owner of the lucky receipt (called the Factura de Sorte) will win a car. (I do have to wonder if that person then has to turn around and pay taxes on that car, though.)
Portugal is not the pioneer of this system, however; São Paulo Province, Brazil, as well as Slovakia and Malta, have set up similar systems. Portugal’s is just much larger. If the system proves to be successful in largely reducing tax evasion in Portugal, it may be worth looking into for other Southern European nations that face similar issues, even on a wider scale that Portugal.
The IRS hasn’t been getting much love lately—or ever, really—but I might be their friend for a few days if they drove a Dodge Dart my way. How about you?
Timothy Moore takes his leadership inspiration from Michael Scott, his writing inspiration from Mark Twain, and his dancing inspiration from every drunk white guy at a wedding. When Tim is not writing about cars, he’s working on his novel or reading someone else’s, geeking out over strategy board games, hiking with his pooch, or channeling his inner Linda Belcher over beers with his friends. See more articles by Timothy.