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Portuguese association of shopping malls contests new real estate tax in state budget 2017

Xinhua, October 21, 2016 Adjust font size:

Portugal's association of shopping malls on Thursday contested a municipal tax on real estate which the country has presented in its state budget for 2017.

The association warned in a statement published on its official website that the municipal tax would lead to divestment in the short term in this sector as well as in other real estate markets.

The association added that it expected the government would modify the proposal in the state budget during the next parliamentary debate.

"We hope there will be a real analysis of the consequences, avoiding, on the pretext of frantically generating revenue, profound imbalances and serious problems in a sector responsible for the modernization and development of retail in Portugal," the statement said.

Last Friday the Portuguese government presented its state budget for 2017, which focuses on rolling back austerity while raising indirect taxes.

As well as raising taxes for high-value real estate, the government is also increasing taxes on alcohol and tobacco, and introducing a "fat tax" for sugary drinks, in an attempt to reach a 1.5 percent growth target next year.

The government said on Thursday it will create more factorable fiscal framework in order for public services to open up in rural areas, which had to be closed several years ago when Portugal was on the verge of bankruptcy.

The government also said it plans to reactivate 20 closed courts and build 34 health centers.

Portuguese Prime Minister Antonio Costa has been optimistic regarding the country's recovery since he took office in November, ensuring he will maintain fiscal discipline while rolling back austerity. However, rating agencies like Fitch have called the government's plans "unrealistic."

Portugal is nearing a crucial credit review by DBRS on Friday, the only agency to grant the country investment grade. Endit