Tax Income in Madeira Grows by 9.2 Percent
Madeira’s regional tax revenue reached €1,318.7 million in 2024, according to new figures released by the Regional Directorate of Statistics (DREM) on June 25. This represents an increase of 9.2% compared to 2023, showing signs of economic recovery, though changes across individual taxes were uneven.
The data, based on national accounting rules under the European System of Accounts (ESA 2010), cover only the taxes that go directly to Madeira. The figures for 2023 are still provisional, and those for 2024 are preliminary, meaning they could be updated later.
Other Taxes: Alcohol and Tobacco Up, Car Tax Down
Among other taxes, several saw significant changes in 2024:
Petroleum Products Tax (ISP): €42.1 million, up 4.2%
Tobacco Tax (IT): €47.1 million, up 12.2%
Stamp Duty (IS): €38.6 million, up 14.2%
Alcohol and Beverages Tax (IABA): €12.2 million, up 22.5%
Vehicle Tax (ISV): €7.1 million, down 2.3%
These figures reflect shifts in consumption and adjustments in reporting rather than a single trend. While alcohol and tobacco brought in more money, revenue from vehicle sales dropped slightly.
Income Tax Revenue Drops as Tax Relief Measures Take Effect
In 2024, personal income tax (IRS) brought in €263.6 million for the Region - a drop of 3.2% from the year before. This decline was mainly due to a tax relief policy at the start of the year that reduced withholding rates, giving residents more money in their paychecks.
Even so, the growing economy helped balance the loss. Employment rose by 3.6%, and the average salary increased by 6.3%. Most of the drop in IRS revenue came from lower withholding on wages (down 9.7%) and pensions (down 9.2%). In contrast, taxes on capital gains and payment notices rose by 4.5% and 6.4%, respectively.
Company Tax Revenue Grows with Support from Business Center
Corporate tax (IRC) in the Region brought in €245.8 million in 2024 — a strong increase of 13.8% over 2023. Much of this came from accounting adjustments linked to the Madeira International Business Center (CINM). The rise was mostly due to payment notices and advance payments from companies.
VAT Continues to Be the Top Source of Tax Revenue
Value-added tax (VAT) remained the biggest single source of tax revenue for Madeira. In 2024, VAT brought in €626.7 million, which is 14.0% more than the year before. This figure made up more than three-quarters (77.6%) of all indirect taxes.
This increase was linked to the continued recovery of the local economy, along with technical adjustments related to previous years. It’s important to note that the Region’s VAT revenue is calculated based on population, not on the exact amount collected on the island.
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