December 15, 2002	Sunday	Shawwal 10, 1423

LISBON, Dec 14: Portugal’s cash-strapped government, under pressure to bring its deficit to within euro-zone limits, put an extra 200 million euros into state coffers last month after a crackdown on tax evaders, the Portuguese weekly Expresso said on Saturday.

The paper, citing an unnamed government source, added the government expected to net another 200 million euros by the end of the year under a progam put in place on November 20 which exempts tax dodgers from interest payments if they pay their back taxes.

It is not praise worthy on principle but it is extremely efficient, the government member told the weekly.

The source said the back taxes, combined with revenues from the sale of the fixed-line telephone network and a deal to allow more toll-road charges, will ensure the government meets its often repeated goal of forcing the nation’s public deficit below a three percent limit imposed on nations that adopt the euro currency.

Finance Minister Manuela Ferreira Leite said Wednesday the government had agreed to sell the state’s fixed-line telephone network to former state monopoly Portugal Telecom for 365 million euros.

She also announced a deal whereby toll-road operator Brisa agreed to pay the government 288.4 million euros for the right to operate toll gates on the ring roads around the Portuguese capital as of next year.

The government has also begun to crack down on owners of commercial vehicles who have not paid their annual automobile tax, daily Diario de Noticias reported on Saturday.

The paper said police departments across the country have been ordered to immediately seize any car or truck which they find on a list of 290,000 commercial vehicles that have not paid the car tax.

Vehicle owners will no longer be able to claim they had left proof of the payment at home, or were in the process of making the payment, to avoid seeing their car or truck immediately seized, according to the report.

With a cooling economy leading to lower-than-expected corporate tax revenues in 2002, the government is under pressure to crack down on tax dodgers in order to meet its 2002 deficit target and avoid EU sanctions for violating euro-zone deficit rules.

Portugal was slapped with an “excessive deficit procedure” a warning to get its finances in order by the EC in October after its budget deficit for 2001 was found to come in at 4.1pc of gross domestic product, well above the three-percent threshold.

In its autumn economic outlook released last month, the European Commission — the executive arm of the EU — predicted Portugal would once again violate euro-zone deficit rules in 2002 and end the year with a public deficit of 3.4 per cent of GDP.

Under the terms of the 1997 Stability and Growth Pact, nations that adopted the euro and which fail to keep their bugget shortfall within the three per cent limit face hefty fines and the loss of EU funds.

But Portugal’s new centre-right government has repeatedly vowed to bring the deficit down to 2.8 per cent of output by the end of the year. Portugal’s finance ministry has said tax dodgers have deprived the government in recent years of one quarter of potential tax revenue.

Roughly 123,000 Portuguese companies, or half the total, paid no taxes either because they declared they were running at a loss or that they were inactive, according to govt figures. —AFP