Portugal announces sweeping tax hikes

Reuters

Portugal will raise taxes across the board to ensure the country collects enough revenues to meet tough budget goals under its 78-billion-euro bailout, Finance Minister Vitor Gaspar said on Wednesday.

The country will raise income taxes to an average rate of 11.8 percent from 9.8 percent currently and slap a 4 percent income tax surcharge in 2013. It will also launch new taxes on capital and luxury property already this year, Gaspar told journalists.

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He said the government will also propose a tax on financial transactions and continue to cut spending, adding that in 2013 all additional austerity measures will amount to 3 percent of gross domestic product.

(Reporting By Sergio Goncalves and Daniel Alvarenga, writing by Axel Bugge)