IL will vote in favor of the government’s proposed legislation to cut the IRS, but proposes that in the next budget the tax will only have two tiers, with rates of 15% and 28%.
These positions were conveyed to journalists in the Assembly of the Republic by the deputy and leader of the Liberal Initiative (IL) Bernardo Blanco.
“In these months, we will again not expect the budget cuts that we expected and will vote for the government’s proposal because, although I would say almost very laughable, it obviously means more money in the pockets of the Portuguese. , even if it is very small,” he said.
For the future, to take effect from the next state budget, IL has presented a bill that, according to Bernardo Blanco, corresponds to the IRS cuts “in a serious way, unlike what the government has presented.”
IL wants to reduce the number of steps from nine to two, he added, noting that “all income of all Portuguese up to the level of the national minimum wage is exempt from tax, so rates only apply above this amount.”
Under the IL bill, annual taxable income up to €13,945 would be in the first bracket subject to the IRS marginal rate of 15%, while income above that amount would be in the second bracket at a 28% rate.
Bernardo Blanco stated that IL was thus fulfilling the commitments of its electoral program, stated that the number of levels in Portugal “very quickly punishes those who want to advance in life through work”, and mentioned that “the European Union has on average three, four levels “
“Based on our modeling, this measure would require more or less tax revenue of around three billion euros,” he said.
According to the deputy, there is a “difference of 1.5 billion” euros regarding the package of proposals of the SDP/CDS-PP government on the IRS.
Bernardo Blanco confirmed that IL does not support the proposal to reduce the IRS for young people, which applies to those under 35, “and does not understand this tax difference.”
IL only intends to see that this change in levels is “applied from the budget, and not now, in these months,” he stressed.
On Friday, the PSD/CDS-PP government approved a bill to reduce IRS marginal rates for all categories except the 9th, which applies to annual taxable income above 81,199 euros.
According to Prime Minister Luis Montenegro, the cost of this measure is 348 million euros, which is added to the 1.191 million euro IRS cut already in force since January, provided for by the previous PS government in the 2024 state budget.
Luis Montenegro said that the sum of these two IRS cuts gives a total of 1.539 million euros compared to 2023.
The government proposes to reduce the marginal rate of the 1st group by 0.25 percentage points, the marginal rates of the 2nd, 3rd, 4th and 7th groups by 0.5 percentage points and the 5th by 0.75 percentage points groups. In the sixth level, the proposed reduction is 3 percentage points, and in the eighth level – 1.25 percentage points.
The proposed law amending Article 68 of the IRS Code will be discussed by the Assembly of the Republic in plenary session on Wednesday.
Author: Lusa
Source: CM Jornal
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