On 9 November 2021, once again, the Ministry of Finance set at 5% the percentage of the amount of coercive collections derived from tax enforcement proceedings initiated by the services of the Tax and Customs Authority (AT) to be allocated to the Tax Stabilisation Fund (FET) in 2022. This means that 5% of the amount collected by the tax administration, within the scope of coercive collections, will provide the Fund, which, by law, allows, among other purposes, the payment of salary supplements to AT employees. To be emphasised: only to them.
This decision is not new. It follows the already long annual tradition of the Minister of Finance allocating a percentage of these revenues to FET.
FET was created in 1996. Since its beginning, it was thought to gather “assets [that] will be allocated to the payment of supplements attributed according to specific particularities of the work performed by the employees of the Directorate General of Taxation and the Directorate General of Information Technology and Support to Tax and Customs Services, as well as to social works. In truth, the high degree of specificity of the functions associated with the coercive collection of taxes and the need to deal in a timely manner with requests for this type of process, as well as special processes for the regularisation of debts, requires an additional effort from the respective officials, who are also faced with a considerable volume of processes and procedures whose regularisation to levels compatible with a modern and fair tax administration is only possible with a significant commitment from those involved. The stimulus for this commitment is indexed precisely to the additional workload and effort that these tasks require, in addition to the normal operating procedures” (preamble of the Decree-Law that created FET). Its regulations specifically provide as a possible application of the revenue, the payment of the salary supplements mentioned, payment to social works that the Board of Directors may decide, and operating and management expenses.
It should also be noted that FET is financed, to a large extent, by that percentage of coercive collections, and the law assigns a maximum of 5% of the total coercive collections. This maximum has been the amount allocated annually.
Facts.
And what should we make of these facts? Specifically, what should we think of the statement that “the high degree of specificity of the functions associated with the coercive collection of taxes and the need to deal in a timely manner with requests for this type of process, as well as with special processes for the regularisation of debts, requires an additional effort from the respective officials who, in fact, are still confronted with a considerable volume of processes and procedures whose regularisation to levels compatible with a modern and fair tax administration is only possible with a significant commitment from those involved. The stimulus for this commitment is indexed precisely to the additional workload and effort that these tasks require, over and above the normal operating procedures”? Doesn’t the entire Public Administration have this duty and this commitment to the smooth running of the public system? Isn’t a coercive collection service – wherever located in the dynamics of the State – a service that has the duty to zealously perform its function, regardless of its results and the effort it makes to do so? Specifically, does this public service need to be valued more highly than, for example, the services of the social security system that also work with coercive collection?
Another element appears to me of difficult acceptance. Ordinance 243/2021 states in its preamble: “The results achieved in the development of the overall activities of the AT and the implementation of projects or programmes to obtain a better and more equitable distribution of the collective tax effort are indicative of the high degree of compliance with the objectives set for the AT in the year 2020, a year characterised by particularly adverse conditions caused by the COVID-19 pandemic.” I question whether the pandemic only required this kind of particularly adverse conditions for AT employees. What about the MDs, Nurses and all hospital assistants carrying out their activities within the pandemic and beyond it?
An additional aspect for consideration is the need, credibility and maintenance of this Fund for financing performance bonuses for AT civil servants in light of the audit conducted by the Court of Auditors on the activity of FET. In 2017, the aforementioned Court analysed the 2015 accounts and concluded: “The accounts of the Funds do not comply with budgetary principles nor are they transparent, as they should show that the Funds only convey the consignment of State revenue to pay for State expenses with AT employees. Moreover, the underlying transactions are materially affected by errors in 2015 due to which the Report expresses an unfavourable audit opinion on their legality and regularity. I t should be underlined that the Funds have accumulated clearly excessive cash availabilities (€1,163 M at the end of 2015) compared to needs, contrary to good financial management practices.” It is also possible to read in the report of the Court of Auditors that “The payment of remunerations financed by fines and other penalties should have been permanently monitored and include the systematic simplification of collection procedures from the taxpayer’s perspective. Instead, there has been an increase in taxpayer obligations with no counterpart in the reduction of the amount of fines.” And it is furthermore acknowledged that “FET has been covering recurrent salary supplements (€71 M per year since 2012) for AT workers, even though many of them do not compete to obtain this enforced collection”. (https://erario.tcontas.pt/pt/actos/rel_auditoria/2017/2s/rel004-2017-2s.pdf)
I understand the need to stimulate civil servants. I understand the need to value the supreme performance of the civil service as a way of recognising the work always carried out amidst scarcity of means and as an instrument to capture value, something so essential to the modernisation of the public administrative organisation. However, I confess that I do not fully understand the distinction and specificity made by FET. I have never fully understood it.
Taxes are, in fact, the most necessary budgetary basis for the achievement of the common good, on which depends the subsequent public intervention and the very sustaining of the entire public administrative system. Still, I do not understand why coercive collection should be subject to differentiation from so many other functions essential to the functioning of the Social State under the rule of law.
I even wonder if this is not an option that unnecessarily accentuates distinctions between public servants who perform functions essential to the smooth running of the State, creating unnecessary and undesirable internal divisions and splits.
And, above all, I wonder whether a measure such as this will not exacerbate the dehumanisation of taxation, making it even more difficult for citizens to understand taxes and the purposes of taxation.
To keep track of Law:
Decreto-Lei n.o 335/97, 2 December – as amended, specifically by Decreto-Lei n.o 113/2017, 7 September – (https://dre.pt/dre/legislacao-consolidada/decreto-lei/1997-108113703)
Portaria n.o 243/2021, 9 November (https://dre.pt/dre/detalhe/portaria/243-2021-173956473)