Reflexões sobre a Avaliação do Quadro Fiscal Regional: Implicações para o Algarve

The article discusses the central conclusions of the study "Evaluation of Regional Fiscal Framework: Business Location and Local Finance" (Barreira, 2008). A reflection on some of the core principles of local finance, equity and benefit, shows that there are inconsistencies in the case of the Algarve. The region has generated tax revenue above the national average in which the property taxes have a disproportionate weight. This situation underlines the dependency of municipalities in the Algarve to the real estate activities around tourism. The number of companies registered does not adequately represent the level of economic activities carried out in the region. Many firms have the headquarters situated in other regions and fracture the desired balance between the recipient and taxpayer. The paper shows that a correction of this problem could increase the weight of the Algarve's economy in the national total and significantly increase the regional tax revenues.