This policy paper aims to provide and discuss empirical estimates of tax effort, tax capacity and tax potential in a comparative perspective with an emphasis on Portugal´s placement within the group of advanced economies. A careful discussion of the concepts of tax effort, tax capacity, and tax potential is particularly important as these offer valuable insights into the efficiency and sustainability of the tax system, providing a basis for informed fiscal policy decisions that can impact economic growth, fiscal stability, and social equity.
Click here to read the Policy Paper 32 – Tax Effort, Tax Capacity and Tax Potential in Portugal