Residents of Madeira pay more Value Added Tax (VAT) in absolute terms than those in Lisbon, the Azores, and the rest of mainland Portugal. Although the VAT rate in Madeira is one percentage point lower than on the mainland, the island's higher cost of living results in a greater total tax paid.
The Ministry of Finance had defined a thirty percent reduction as necessary for Madeira and Azores residents to pay the same VAT as mainlanders. However, for Madeira and Porto Santo, the reduction was only one percentage point, which the article's author considers a penalty.
The costs of insularity, exacerbated by excessive taxes, make the indirect tax burden heavier for Madeirans. The article advocates for the creation of a regional substitute for VAT that is fairer and aligned with the region's social and economic interests, questioning the island's inability to achieve a per capita GDP equal to the mainland's.
