Lagoa, Albufeira and Loulé lead municipalities with greater financial independence

Yearbook has the support of the Order of Certified Accountants and the Court of Auditors

Lagoa, Albufeira and Loulé lead the ranking of the municipalities with greater financial independence in 2021, according to the Financial Yearbook of Portuguese Municipalities, released this Monday in Lisbon, in a session that featured the Secretary of State for Local Authorities, among other personalities.

The list of the 35 municipalities in the country with greater financial independence also includes eight other municipalities in the Algarve: Vila Real de Santo António (4th), Lagos (7th), Portimão (11th), Vila do Bispo (13th), Tavira (20th), Castro Marim (22nd), Silves (27th) and Faro (29º).

VRSA and Vila do Bispo are considered small municipalities, while all the other Algarves are medium-sized, which highlights their position in this classification.

Next ranking, the first three major municipalities are Cascais (5th), Lisbon (6th) and Almada (8th).

Conversely, all 35 municipalities with less financial independence are small. Alcoutim (10th) is the only Algarve to make this list of the last ones.

According to document to which the Sul Informação had access, 'a municipality is financially independent in cases where its own revenues represent at least 50% of total revenues'.

In medium-sized municipalities, state transfers contributed significantly more than own revenues to total revenue, with an average weight of 50,1% and 46,3%, respectively. The weight of state transfers rose 1,4pp and the weight of own revenues dropped 2,3pp.

For small municipalities, the largest revenue is represented by transfers from the OE through the Fundo de Equilíbrio Financeiro (FEF), translating, on average, 71,1% of total revenue in 2021.

The average weight of own resources in total revenues, in the same year, was 25,8%, which means little more than ¼ of the total financial resources generated, translating a very low financial independence in this category of municipalities. In 2021, the independence indicator dropped by 2020pp compared to 0,8 and the weight of transfers grew by 0,9%.


As for the top 100 ranked globally, the ranking The global ranking for medium-sized municipalities is headed by Marinha Grande and Abrantes, followed by Lagoa (3rd), which even dropped one position compared to 2020, when it was 2nd.

This ranking The national total also includes, among the top 20, the municipalities of Tavira (5th), Loulé (6th), Lagos (13th) and Albufeira (15th).

With regard to small municipalities, Vila do Bispo (11th) is the highlight, in a list headed by Santana, in the Autonomous Region of Madeira.

The top 25 on this list also includes two other Algarve municipalities: Aljezur (23rd) and São Brás de Alportel (25th).

In the Algarve, as you can see in the map below, half of the 16 municipalities make the list of the 100 with the best financial efficiency: Aljezur, Vila do Bispo, Lagos, Lagoa, Albufeira, Loulé, São Brás de Alportel and Tavira.



The Financial Yearbook published by the Order of Certified Accountants adds that the Municipal Councils' own revenues grew, in global terms, last year, mainly due to the 10,4% increase in the collection of direct taxes, with emphasis on the IMT (Tax on Onerous Transmissions, the old sisa).

According to the document, «the year 2021 was a good year of tax collection», with 359,9 million euros more collected by the Municipalities (+10,4%) in direct taxes than in the previous year, for a collection of 3.807 million euros.

Within the collection of direct collection taxes by the Chambers, the highlight is the significant growth of the IMT, whose collection rose 370 million euros in 2021, to 1.345 million.

On the other hand, the collection of Property Tax (IMI) fell slightly, to 1.480 million euros (1.497 in 2020), as did the surcharge, which amounted to 297 million (347 in the previous year), while the Property Tax Car Circulation (IUC) grew slightly to 291 million euros.

The Financial Yearbook of Portuguese Municipalities is the responsibility of the Accounting and Taxation Research Center of the Polytechnic Institute of Cávado and Ave, as well as the Political Science Research Center of the University of Minho, coordinated by Professor Maria José Fernandes and the contribution by researchers Pedro Camões and Susana Jorge.

Produced since 2004, the document has once again the support of the Order of Certified Accountants and the Court of Auditors, assuming itself as a reference in the municipal panorama.

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