Portugal rolled out a new fiscal incentive for companies, saying it will allow a 20 per cent tax deduction on investments of up to €5 million to help drag the bailed-out economy out of a deep recession.
Finance Minister Victor Gaspar said the fiscal credit measure was an "innovative and unprecedented" move that will serve as catalyst for economic growth and jobs creation, adding that the recovery should begin in the second half of the year.
"The moment for investment has come", Gaspar reiterated. He said the incentives will not compromise Lisbon's budget deficit goals under its EU/IMF bailout and already have the green light from the European Commission. Gaspar said the move will have an immediate impact on the economy and could lower the corporate tax rate to as low as 7.5 per cent in some cases from the regular rate of 24 per cent.
The measures are mainly aimed at small and medium-sized companies that make up the backbone of Portugal's economy. Their access to funding has been severely hampered by the country's debt crisis.
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