Taxes

Madeirans have been liable to taxes since early times, as the charter (foral) of the city of Funchal and of the towns of Ponta do Sol (‘point of the sun’) and Calheta (‘small cove’) shows, together with various documents recorded in the municipal archives. When King Duarte granted his brother, Prince Henry the Navigator, the lordship of the islands of the archipelago, he gave him ‘all the rights and revenues thereof’. From the grants of the three captaincies of Funchal, Machico and Porto Santo, we know that the prince authorised their respective donataries to receive ‘one in ten of everything he should have in revenue, according to the charter, in the said captaincies. The charter of 1515, transcribed on p. 494 ff. of ‘Longing for the Homeland’ (Saudades da Terra), contains a reference to Prince Henry’s charter, which shows that the tax burdens he imposed on the people of this archipelago were heavy indeed.

In the articles Sugar and Customs Houses in this Elucidário we have already referred to some of the taxes that Madeirans paid in former times. We shall now give a brief account of other tax burdens that also weighed on the population of the archipelago. Some of them, such as the tithes, the property décima, the fifth, the literary subsidy and the finto (war tax apportioned among residents), survived into our own day, until they were abolished by the law of 11 September 1861. It was this law that brought the Madeira archipelago into the tax system adopted in Portugal, since it provided that from 1 January 1863 the legislation governing property, industrial and personal taxes in mainland Portugal should apply to the archipelago.

The tithes, which we suppose to be the oldest tax known to Madeirans, date from the first years of settlement. Prince Henry’s charter laid down that they were to be deducted from wages, services, day-labourers’ pay, the earnings of merchants and craftsmen, sales of new crops, leases and rents, and from all things grown and bred on the island.

The charter of 6 August 1515 abolished some of these tithes, for example those taken from wages of any kind and from the earnings of merchants and craftsmen, etc. It kept the tax, however, on cereals, livestock, wool, wine, fruit, vegetables, cheese, eggs, butter, milk, honey and countless other things produced on the island.

The same charter further provided that a tithe be paid at the customs house on sugar and on all other goods exported outside the Kingdom (reino, i.e. mainland Portugal). Of the goods exported to the Kingdom, only those destined for foreigners or carried in foreign ships were to pay the tax.

Many goods imported from outside the Kingdom paid a tithe, but those coming from the Kingdom paid it only when brought by foreigners or carried in foreign ships. Cereals, olive oil, chestnuts, peas, cheese and all other goods imported to feed the public never paid a tithe, whereas silver, arms, horses, books and clothing were exempt only when they were not for sale. Firewood could be imported freely.

Most of the tithes belonged to the Order of Christ (Ordem de Cristo), but after the mastership of the Order was incorporated into the Crown they were collected by the Royal Treasury (Fazenda Real). The costs of worship were paid from them, and in 1626 they were not enough to cover the stipends of the dignitaries, canons and other staff of the Cathedral (Sé Catedral), as the royal decree (alvará) of 10 June of that year shows.

The royal decree of 1 August 1752 secularised the portion of the tithes exceeding what was needed to maintain the clergy. By royal grant, the Jesuit and Franciscan religious orders and the secular clergy were exempt from paying this tax, at least in the early period.

For a long time the tithes were collected by leasing them out, and there was even a period when they were leased as a single block.

The property décima (décima predial), as its name suggests, was levied on buildings and land; it has now been replaced by the property tax. Before the property décima, Madeirans paid the urban décima (décima urbana), created by the law of 10 June 1808.

The fifth, abolished together with the tithes and the property décima by the law of 11 September 1861, consisted of payment of one fifth of all the property known as Crown property. The literary subsidy (subsídio literário), created by the law of 10 November 1772, was a tax levied on spirit (aguardente, distilled from sugar cane or wine), wine, vinegar, etc., and was intended solely for the upkeep of schools and the payment of teachers.

The fifth was paid by the chantries (capela) and by the donataries’ redízima (a tenth of the Crown’s revenues due to the donatary). In 1836 the administrator-general (administrador geral) ruled that the Marquis of Castelo Melhor should be assessed for the said redízima from 1831 until the abolition of the chief castellanship (alcaidaria-mor) of Funchal. In former times the fifth was assessed on donataries who held Crown property and chantries before the corregedores (royal magistrates), but the law of 24 April 1835 required the Municipal Councils (Câmaras Municipais) to appoint, for each parish (freguesia), a board of six citizens charged with apportioning this levy. On folio 31 verso of volume XVIII of the General Register of the Municipal Council of Funchal there is a list of the chantry properties in the municipality (concelho) of Funchal that were subject to the fifth.

The finto (war tax apportioned among residents), or décima, decreed for three years by the Cortes (Portuguese parliament) of 1641, was a war tax. At first levied at a variable rate, it was fixed by the regulations (regimento) of 10 April 1646 and the royal decree of 26 September 1762 at 10 per cent of all income from property, capital, industries and trades. From the regulations of 9 May 1654 onwards nobody was exempt from paying this tax. It amounted to 8,600,000 réis (old Portuguese money of account; 1$000 = 1,000 réis, 1:000$000 = one conto = 1,000,000 réis) in the first assessment and was later reduced to 4½%, or 3,600,000 réis.

The finto belonged to the State, but before 1834 its proceeds were collected by the Municipal Council and then handed over to the Treasury Board (Junta da Fazenda). The Council appointed the individuals who apportioned the tax among the taxpayers.

The finto of 3,600,000 réis, or 9,000 cruzados a year, was not always paid punctually. By a royal decree of 1 April 1749 John V remitted the amount of this tax for the years 1739 to 1749, because of the damage the earthquake of 1748 had caused the island. In 1799 the people owed the Treasury Board 162,000 cruzados, arising from 18 years of the same tax, which the government ordered to be collected.

Besides the tributes we have just discussed, Madeirans paid others, some for the costs of war and fortifications, others for different purposes.

The first war contribution imposed on Madeira appeared in 1478. It was followed by that of 1493, which was never actually paid, and by those for doublets and cuirass corps, the former established in 1497 and the latter in the following year. There were later other war contributions, or fintos, the heaviest of which was that of 10,000 cruzados (old Portuguese coin worth 400 réis) a year, from 1637, for the fleet to recover Pernambuco. It was then, in the opinion of Dr Azevedo, that the Madeiran clergy were for the first time obliged to share the tax burdens of the population. The nobles, who had rebelled against the contributions of 1478 and 1493, afterwards paid without resistance all the other taxes levied by the central government.

The contribution known as the donativo (nominally a ‘gift’ to the Crown; a compulsory war levy) fell on produce and was likewise intended for war expenses. The first enactment referring to it that is recorded in the archive of the Council dates from 1635, and the last from 1691.

The municipal levies (imposição) on fresh meat (carnes verdes) and on wine sold retail, which date from the period immediately after the settlement of the archipelago, were sometimes applied to the costs of fortification, even though they were exclusively municipal revenues.

This tax, which was a kind of royal grant duty, was levied on all honorific favours, both civil and military, salaries, allowances, etc. It spared only the pay of the other ranks and seamen of the army and navy and emoluments not exceeding 50 cruzados a year.

From the earliest days of settlement Madeirans paid customs duties. Both before and after 1834, the calculations of the State’s resources on this island include the revenue from the two indirect contributions of the real de água on wine and on meat, and from the following direct contributions: royal grant duties, the eighth (oitavo, a tax of one eighth of the produce) on sugar and the tax on estufas (heated store for ageing Madeira wine). In 1646 a tax of one cruzado was established on every pipa (wine cask and measure, c. 400–500 litres) of wine exported; this was the starting point of the duties on wine exports collected at the Funchal Customs House.

Madeira yielded 25,000,000 réis (old Portuguese money of account; 1$000 = 1,000 réis, 1:000$000 = one conto = 1,000,000 réis) to the State in 1628, but the work from which we have taken this information does not say where this sum came from. In 1806, according to Tovar de Albuquerque, the tithes yielded 65,000,000 réis, the subsídio literário 7,000,000 réis, the wine levy (imposição do vinho) 15,000,000 réis, of which, however, only half belonged to the State, the fintos 3,600,000 réis, the wine estufas 2,000,000 réis, fish and meat 3,500,000 réis, the customs house 180,000,000 réis and other taxes 20,000,000 réis. In the financial year 1848–1849, on the other hand, as we read in vol. II of the Epocha Administrativa, the tithes produced 18,030,126 réis, the subsídio literário 6,202,386 réis, the real de água on wine 5,093,764, the finto 1,386,756 réis, the tax on fish 907,060 réis, the real de água on meat 1,805,751 réis, the tax of 3 réis on each libra (Portuguese pound, c. 459 g) of meat 3,477,351 réis, the customs house 109,276,641 réis, the sisas 5,553,802 réis, royal grant duties 863,709 réis and other taxes and duties 11,490,219 réis. We read somewhere that in 1820 Madeira yielded 529,462,215 réis, the revenue from the subsídio literário being 4,840,680 réis.

We lack the data to expand this account of the contributions formerly paid in Madeira any further. From what has been said above, however, it is abundantly clear that, however overburdened with taxes we may be now, our situation is incomparably better than that of the first inhabitants of Madeira. The present industrial, land, sumptuary and registration contributions, and today’s indirect taxes, almost amount to a kindness on the part of governments when compared with the tithes and the thousand other imposts with which Prince Henry the Navigator and the monarchs of old saw fit to burden the people of this island.