PS considers the government’s decision on the IRS a “natural outcome”

This Friday, the Socialist Secretary General considered the government’s decision to approve the new IRS income tax tables “a natural outcome”, noting that “the Portuguese will benefit from a solution that benefits the majority.”

“Today, the Portuguese are benefiting from a solution that benefits the majority, as the PS has always defended. We guarantee a reduction in the IRS that distributes the money returned to families in a more equitable way,” Pedro Nuno Santos said on the social network X. .

The PS leader said that “the government’s decision to approve the new income tax tables, reflecting the law defining the IRS reduction, approved by the Assembly of the Republic and promulgated by the President of the Republic, is a natural result.”

“The government had no reason not to fulfill its commitment to reduce the IRS this year,” concludes Pedro Nuno Santos in the same publication.

The Ministry of Finance said in a statement sent to the editors today that “following the promulgation of AR Decree No. 7/XVI of the President of the Republic, which modifies the IRS rate table, the government will approve new withholding tax tables that will reflect the reduction in IRS rates.”

In addition, “a retroactive mechanism for this IRS rate cut would also be approved, which would take into account taxes already applied to work income and pensions.”

The parliamentary decree to reduce IRS rates to level 6 was based on the PS bill and was unveiled by Marcelo Rebelo de Sousa this week, although the government has expressed doubts about the constitutionality of the measure because it could violate the brake rule, which prevents parties with seats in parliament from approving proposals that exceed expected spending.

The president decided not to require a preventive review of the law because he believed that “the timing of the impact on state revenues depends on state regulation through the establishment of taxes withheld at source, so they can also only have an impact on the next budget year,” according to a note published on the president’s website.

When it put forth its IRS cut proposal, the government said it wanted the impact of the new rates to be felt in the pockets of workers and retirees this year because they would be reflected in new IRS withholding tables.

However, after discussion in parliament, the PS proposal was approved and doubts arose as to whether the government would change the retention tables, as no government official had committed to doing so.

It has now been confirmed that the government will reflect the IRS cuts in income tax tables due to come into effect in September.

According to the approved resolution, the rates for the 1st and 2nd levels have been reduced from 13.25% to 13% and from 18% to 16.5%, respectively, while in the 3rd level a reduction is envisaged from 23% to 22%, and in the 4th group from 26% to 25%.

In groups 5 and 6, where current rates are 32.75% and 37%, rates are reduced to 32% and 35.5%, respectively.

There will be no reduction in the rates of the other three IRS groups, contrary to what was envisaged in the Government’s original proposal and the replacement text for PSD and CDS-PP, which left only group 9 unchanged.

According to consultant Ilya’s modeling, the reduction in IRS rates will result in an annual tax reduction that ranges from 10.08 to 402 euros for salaries of 900 and 3,000 euros gross, respectively.