Portugal ramps up fight against tax evasion with fancy cars draw

Fri Apr 4, 2014 6:43am EDT
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By Andrei Khalip

LISBON (Reuters) - Asked by an attendant if she wants a personal invoice on a 15 euro purchase in a Lisbon pet shop, Lucia Miranda excitedly addresses her tiny pooch: "Do we want to win an Audi, au-au? Yes we do. Sure we want the invoice."

It may seem absurd, but the 56-year-old notary is talking sense. A state draw offering fancy cars on invoices issued with individual taxpayer numbers has firmly grabbed the attention of the Portuguese - those hopeful to win and critics alike.

On April 17, the government will give away the first two Audi A4 sedans in what will then be a weekly draw for a year.

"The Lucky Invoice" draw, which will be televised, is aimed at stimulating the fight against tax evasion and the large shadow economy in cash-strapped Portugal where the tax burden is at record levels after years of austerity.

The government says the number of such invoices jumped 45 percent in January - the first month the bills qualified for the lottery - from a year earlier to 46 million.

State Tax Secretary Paulo Nuncio told Reuters that the steep rise "shows the growing level of consumer adherence to the fight

against the parallel economy." He estimated that new measures against tax evasion could add between 600 million and 800 million euros in tax revenues in the medium term.

A study by AT Kearney consultants at the end of last year showed that the shadow economy accounted for about one-fifth of Portugal's gross national product, or over 31 billion euros. At 19 percent of GDP, that was almost 7 points above western Europe's average. The study acknowledged that Portugal was a forerunner in taking measures to address tax evasion and fraud.   Continued...

A tram is seen in downtown Lisbon September 3, 2013. REUTERS/Rafael Marchante