“Government must create a mergers and acquisitions policy” for companies to gain financial muscle

The new government led by Luís Montenegro has already announced some measures to support companies, such as a reduction in corporate income tax, but experts interviewed at the EContas launch conference believe that the government should go further. They argue that a mergers and acquisitions policy should be created so that national companies can gain size and financial muscle and thus boost the economy. Attention should also be paid to tax simplification.

“ There is a lack of measures related to corporate concentration. It seems to me that economic growth comes largely from corporate concentration in many sectors. We are seeing more mergers and acquisitions. We do not see specific measures aimed at this type of solution ” that would allow “creating more value for the economy”, stated Filipa Xavier de Basto, CEO of Grupo Your, at the conference “Tax Policy as an Agent for Transforming the Economy” to mark the launch of EContas, ECO’s new information brand. This is in addition to the need to move forward with tax simplification and “tax benefits that promote business growth”, she added.

This position is shared by Rogério Fernandes Ferreira, president of the Portuguese Tax Association. “Companies should have more financial muscle” and, to achieve this, “there should be an effective policy on mergers and acquisitions of companies. The State should promote this”, he argued in the same panel on the role of financial accounting in economic growth.

“The Portuguese business community needs to change. We cannot promote small and medium-sized companies. We need to promote large companies. There should be a general and effective policy, including tax and wage policies, so that companies can become large,” he stressed.

“We are managing the State like a bad grocery store”

Regarding the measures already announced by the Government – ​​namely the reduction of one percentage point in the general IRC rate, from 20% to 19% – the tax expert said that “more important than reducing the IRC rate is reducing the contextual costs”. The tax expert acknowledges, however, that “the IRC is wrong”, because “it should be proportional and not progressive”. “The system is not coherent. Perhaps it should be reduced at the top and not at the general rate, but we have to start somewhere”, he said.

Carlos Lobo, former Secretary of State for Tax Affairs, was also very critical of the way in which various governments have managed public accounting. “The system dates back to the 19th century, is obsolete and suicidal”, because it is limited to a “cash perspective”.

“What we do is accommodate revenue and expenditure in a basic concept of budget deficit or surplus and the maintenance or appreciation of assets is discouraged. We are managing the State like a bad grocery store,” he said.

“This is a disaster that cannot be managed, so true State reform must begin with public finances and public accounting ,” argued the former Secretary of State.

Accountant as a strategic partner

Another way for companies to grow is through reporting correct and transparent financial data , counting on the certified accountant as a strategic partner in decision-making, experts argued.

“Our business community continues to be made up of small and medium-sized companies and a few large companies. The concern for complying with legal and tax obligations is precisely to comply with these obligations,” stated Rogério Fernandes Ferreira. “Well-structured, transparent accounting is not limited to the internal sphere of companies. It improves predictability, decision-making, relationships with customers and suppliers and improves relationships with current and future investors.”

Filipa Xavier de Basto believes that “we are witnessing a change in mentality [regarding the figure of the certified accountant] because it is a fact that the companies that have more support in terms of reporting to management are the companies that grow the most , that transmit the most confidence to stakeholders and that innovate the most”.