PS Changes IRS Cut Proposal, Cuts Even More Band 6 Tax

This Friday, the PS presented to Parliament a new proposed amendment to the IRS, which is closer to the text presented by the AD, agreeing to a further reduction in the rate that applies to the 6th income group.

Changes to the rates applicable to income groups have been the subject of the greatest controversy between the PS and the government and its supporting parties in parliament (SDP and SDS-PP) since the executive approved the proposed change to the tax in the Council of Ministers.

Since then, there have been proposals for amendments aimed at convergence on both sides, and the text presented this Friday by the CoP takes another step towards consolidating the various changes advocated by the various parties, namely BE, PCP and replacing the text signed by PSD and CDS -PP.

In the new text of the socialists they propose to reduce the rate applicable to the 5th income group to 32% (in the previous text the PS defended 32.5%), which is in line with the value advocated by the government.

As for level 6, after the SDP and SDS-PP proposed that the rate should be 35% (rather than 34% as initially advocated by the government), the PS is seeking to move closer, pointing to 35.5% (previously advocated 36 %).

In the fifth and sixth brackets are people whose gross monthly salary ranges from 1800 to 2200 euros and from 2200 to 3100 euros, respectively.

However, there remains a difference regarding the rates of 7th and 8th levels, which the SDP and SRS-PP want to reduce from the current 43.5% and 45% respectively to 43% and 44.75%, and which the PS approves. that they should not be changed because they benefit a small percentage of people, despite the fact that they absorb the greatest (financial) effort associated with the measure.

In the previous amendment proposal, PS also defended a “structural definition” of the rule to regularly update specific deductions as the social support index rises, in line with what BE proposes, but giving “complete discretion to the government.” determined in the coming months, the amount of the specific deduction will increase from January 1, 2025.”

The same type of solution is proposed for updating IRS tiers.

Taking into account the BE proposal, the PS also wants to recommend that the Government include an extension to the deduction of interest payments on home loans as part of the review of housing support legislation.

Various proposals for changes to the IRS will be discussed and voted on in detail by the Committee on Budget, Finance and Public Administration at a meeting scheduled for June 5.