The Secretary of State for Tax Affairs, António Mendonça Mendes, said, in an interview with Lusa, that it is “expected” that IRS refunds will start to be processed earlier this year than in 2020.
“What I can guarantee is that we are in a position to carry out the IRS campaign, proceed with the liquidations and proceed with the refunds. It is normal and it is expected that repayments this year may be relatively quicker than they were last year, ”António Mendonça Mendes told Lusa.
Last year, the first refunds were processed on April 21, that is, 21 days after the campaign for the submission of the annual income tax return began, a longer period of time than that recorded in previous years, but that Mendonça Mendes considers that he reflected the speed “appropriate for the moment”, that is, the fact that the country was at that time facing its first general confinement.
This year, he recognizes, the context is "similar" to last year, but there is a big difference: an accumulated experience that did not exist in 2020, namely with regard to the fact that a significant part of the employees of the Tax Authority (AT) be performing their functions in telework because of the restrictions imposed by the need to contain the Covid-19 pandemic.
“Last year, when the last preparation times for the IRS campaign coincided exactly with the beginning of the confinement, it was normal for us to be more cautious in the way we would have to do the settlements”, said the government official, remembering that these are not only reimbursements result, but also payment or void bills (where there is no place to pay more tax to the State or to receive reimbursement).
Despite the conditions, the AT "managed to make the settlements well before the legal deadline for doing so" (which the law sets at 31 August) and, over the weeks, "the operations became more and more routine" which allowed the reimbursement times to end up becoming “very similar to those of previous years”, said the government official, not wanting, however, to set a date for the beginning of the process of refunding the tax paid in excess by taxpayers.
"Our expectation is to make a safe campaign in the way we do the sales so that no one is harmed, neither the public purse nor the people, who expect to receive your refund as quickly as possible," he said.
Since the IRS reimbursement is the result of the sum of withholding taxes and deductions from taxpayers' collection, António Mendonça Mendes pointed out that the Government has sought, in recent years, to reflect policy decisions in the retention tables - examples of which are extension, from five to seven, of the taxable income brackets or the creation of the Youth IRS.
The objective, he said, is that the withholding tax should be closer and closer to what is due and that “the refunds are due more than they are or the municipal tax benefits or deductions” and not result “exactly from an excess of retention that may exist ”.
Bearing in mind the correctness of the withholding tax tables in 2020, the average amount of reimbursement may therefore be lower this year.
Launched with the State Budget for 2020 (OE2020), the Youth IRS will be reflected for the first time in the annual tax return that will be submitted this year and whose deadline for doing so starts this Thursday, April 01st, ending on June 30.
When the measure was launched, the Government estimated that it could reach up to about 160 thousand young people, but the impact of the pandemic on economic activity may have changed the potential universe, and only in September, Mendonça Mendes said, will it be possible to make a first assessment and see how many people have benefited from the measure.
Aimed at young people between the ages of 18 and 26 entering the labor market after completing secondary or higher education, this measure grants an exemption of 30%, 20% and 10% during the first, second and third years of activity, respectively, which means that they will pay IRS on 70%, 80% and 90% of the income they earn in those years, with some limits.
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