Despite the economic crisis, revenue from the motorways is up, according to the national road company Estradas de Portugal – EP, with former virtual or SCUT toll roads reporting the biggest increases.

Interestingly enough the motorways in the Greater Lisbon Area and in the northern part of the country saw their receipts dropping during the first half of the year, the south being obviously the most traveled through part of the country.

EP highlighted the strong performance of the Algarve A22 motorway, saying that it saw a rise of 22 percent in its income, which amounts to about a 1.6 million euro increase when compared to the same period of 2012. The statement went further in saying that the peak summer period wasn’t taken into consideration when this study was made and since that is by far the peak traffic time for the Algarve, the numbers might actually be higher.

It’s an interesting time for these numbers to be coming out because there have only been two months since EP chief Antonio Ramalho expressed real concerns over the sustainability of SCUT motorways. This is due to the fact that vehicles without an electronic tagging device which use the SCUT motorways, cost as much to bill as the amount they pay in order to use the road.

Despite these positive numbers Mr. Romalho argued that the current system is unsustainable and it won’t be capable in the long term to maintain and preserve the road network.

We do know that a new toll system is in the works for the A22, we have to wait and see how these things will evolve in the future.

Why this distinction? Well because of the way in which the payment options have been implemented, it’s relatively easy – even if annoying – for Portugal residents to pay the tolls but for those who come into the country from abroad there are numerous problems to solve.

In case you’re arriving from Spain in a foreign registered car

At the border on the A22 you’ll find automatic vending machines from which you can rent a transponder by entering your car’s registration number as well as your credit card number. When you return you can drop off the transported at the last service station in Olhao where you’ll get part of the original cost refunded. The tolls are charged to your credit card and in case the vending machine is busy you can also rent a transponder at the Olhao service station. You can also rent the transponders at any Post Office as well as from the Faro Airport Post Office.

There are also some other alternatives in the form of pre-paid passes which you can purchase from any Post Office.

In case you’re planning to employ Faro Airport car hire services

This has been a major problem ever since the tolls were applied with rent a car companies having been in discussions with the government for several months but a solution might be close to being implemented.

Basically the rental car companies will be installing transponders in all their cars, which will add 1.5 Euros per day to your rental costs, plus the tolls of course.

You’ll be better served to talk to your car rental provider about the details related to the A22 tolls, because information is constantly changing because nobody is happy with the current system and the authorities are trying to deal with it.

It appears to tat the International Monetary Fund – IMF – sees some untapped financial potential for the Portuguese government to increase the VAT on goods and services like wine, processed foods and cultural events thus further widening the tax base. The current VAT for these is set at 13% and the IMF suggests that it can go up to 23%.

This assessment is part of the IMF country report which is part of the sixth evaluation of Portugal’s bailout programme.

While the IMF recognizes that equity concerns are the main argument for the reduced VAT rates, when it comes to more absolute terms, higher income earners end up benefiting much more from it than those with medium and low incomes.

This would mean that significantly reducing the number of goods and services that are subject to these lower and intermediate VAT rates can be a “positive policy”.

What this means in more clear information is that all of the items subject to the intermediate rate of 13% – wine, cultural events, processed food – would start being taxed at the maximum rate of 23%.

This will mean that the minimum VAT rate of 6% which is applicable to meat, fish, vegetables and other basics, would see a rise to the intermediate rate of 13%.

The report concludes saying that the country faces a very significant challenge to complete its fiscal consolidation while also enhancing the equity and efficiency of its fiscal policy.

While all of this reporting was going on, many Portuguese organizations have already staged protests against the suggested VAT rise with the president of the Farmers Confederation of Portugal saying that his organization is totally against the VAT hikes for farming produce because the measure won’t bring in more tax revenue, but it will instead hurt the entire chain from producers to consumers.