Political party financing in Portugal

Political party financing in Portugal covers the laws and practices that govern how Portuguese political parties and election campaigns raise and spend money. The accounts of parties and campaigns are checked by the (ECFP, Entity for Political Accounts and Financing), which works alongside the Constitutional Court. The most debated episode in recent years was a 2017–2018 change to the financing law. It removed the cap on party fundraising, was vetoed by President Marcelo Rebelo de Sousa, and was then passed again in amended form.

Rules before 2017

Before the 2017 changes, money raised through fundraising events was capped at 1,500 times the Social Support Index (Indexante dos Apoios Sociais, IAS), about €632,000 in 2017. Individual donations were capped at 25 times the IAS per donor per year, a little over €10,000. Parties were exempt from value-added tax (VAT) only on goods and services used to spread their political message, such as printed material, advertising, and transport. Party and campaign accounts were checked by the ECFP, which assisted the Constitutional Court. The court both supervised the accounts and ruled on appeals.

2017–2018 reform

Working group

In March 2017 the parliamentary Committee on Constitutional Affairs set up a working group. Its original task was to respond to problems the Constitutional Court had raised about checking party and campaign accounts. The group met nine times behind closed doors between April and October 2017. According to Observador, confirmed by several parliamentary sources, no minutes or written records were kept. Proposals were labelled with letters rather than party names, so it was impossible to tell who had proposed what. Over time, the group also took up changes to the financing rules themselves.

All parliamentary parties took part. The changes were agreed by the PS, PSD, PCP, BE, and PEV, while the CDS opposed them. The final text went to the committee on 18 October 2017.

Main changes

The bill passed in December 2017 made these changes:

• Fundraising cap removed: parties could raise unlimited amounts through their own fundraising events. The cap on individual donations stayed the same.
• Wider VAT exemption: the exemption would cover all goods and services bought for party activity. ECO noted that this could include costs for party festivals such as the PCP's Festa do Avante!.
• Free use of public spaces: free use of spaces owned by the state, local councils, or public bodies would no longer count as party or campaign income, as long as all parties were treated the same.
• New oversight model: the ECFP would check party and campaign accounts and impose fines itself, and the Constitutional Court would hear appeals against its decisions.

Veto and second vote

The bill passed with votes from the PSD, PS, BE, PCP, and PEV. The CDS-PP and PAN voted against it. On 2 January 2018 the President vetoed it, citing the "absence of publicly scrutinisable justification" for the change to how parties are funded. The PS and PCP said they would confirm the law. The BE said it was open to improving it. The PSD waited for its new leader, Rui Rio, who had criticised the bill. The Transparency International chapter in Portugal had urged the President to veto, saying the changes threatened the quality of democratic institutions and created new risks of corruption.

Parliament then passed one change, proposed by the CDS-PP, that kept the existing VAT rules and dropped the wider exemption. The cap on fundraising stayed abolished. The President signed the revised law in March 2018. He restated his "fundamental objection" to removing any limit on private funding, but chose not to veto it a second time.

Oversight and audits

For years, ECFP officials have warned that the body lacks the staff and resources it needs, which causes long delays in checking party and campaign accounts. In 2022 it launched PORTAL-ECFP, an online platform where parties and campaigns file their annual accounts.

Audits of the parties' 2020 accounts were only finished in early 2026, about five years later. The reports sent to the three largest parliamentary parties included:

João Paulo Batalha, a former president of the anti-corruption group Transparência e Integridade, said a five-year wait made audits almost pointless, because party leaders and financial officers have often changed by the time results arrive.

See also

• Campaign finance
• Politics of Portugal
• Constitutional Court of Portugal
• Transparency International