Funchal City looses IRS case

Portuguese Municipalities are entitled to receive 5% of Portugal's IRS, but all the IRS collected in the Autonomous Regions stays in the regions.

A battle of wills has been fought over the last years over who should pay the municipalities, the Central or Regional Governments. Funchal City took the National Government to Court over the matter and won at the lower Court. An identical case was pursued in the Azores. The Central Court also deliberated in favour of the Autonous Region. Both judgements were made by the same judge, Madeiran judge, Paulo Gouveia - who for many years had the powerful position of being the only judge in the Administrative Court in Madeira.

The Supreme Court has now overturned the ruling, saying that the Central Government cannot pay out what it never received.

Funchal Municipality intends to appeal to the Constitutional Court, rather than sending the bill to Jardim, with whom the Funchal Mayor is now at loggerheads.