Portuguese PM under fire over tax questions

Portugal’s Pedro Passos Coelho i, the face of austerity in the Iberian country, is under fire for allegedly not paying social security contributions during a five-year period before he was prime minister.

He was questioned before parliament on Wednesday (11 March) but appears to have emerged unscathed from the process.

"I wasn’t aware of the obligation to pay," he told MPs. "I don’t accept political manipulation about my contributions and tax situation," he added.

A report on 28 February in Publico newspaper suggested that between 1999 and 2004, when Passos Coelho was self-employed, he did not pay into the social security system.

The debt, according to the newspaper, was €7,430. Passos Coelho himself suggested it was €3,914, which he paid in order to “put an end to unfounded accusations”.

Expresso newspaper also reported in recent days that between 2003 and 2007 Passos Coelho had five enforcement proceedings for delays in tax payment.

He put it down to “distraction and lack of money”.

Passos Coelho, a centre-right politician, has led a coalition government with the conservative CDS since June 2011.

He took office a month after the previous Socialist government asked for a €78bn bailout and implemented a series of tough austerity measures, including cuts to wages and pensions, cuts to spending on healthcare, justice and education, as well as tax hikes.

This has left the country with a purchasing power that was 24 percent below the EU average in 2012 and 21 percent below in 2013.

However the revelations about the prime minister's "contributive evasion", as it is being termed, has failed to really unsettle the political scene.

The socialist opposition party, during the parliament debate, was seen as lobbing only softball questions on the issue.

Meanwhile, in a country where thousands of workers end up not paying social security contributions, due to lack of money, Passos Coelho’s popularity has hardly been affected - 35.5 percent of Portuguese have confidence in their PM, down from 36.1 percent in February.

His party (PSD) is second in the polls on 28.9 percent behind the Socialists on 36.1 percent. General elections will happen later this year, after September.