PM asks PS and Chega for clarification on IRS cuts

The Prime Minister said on Tuesday that he respects the decision of the President of the Republic to publish several diplomas approved by the opposition and asked the PS and Chega to clarify the timing of the application of the diploma that reduces IRS rates.

Speaking to reporters in Luanda ahead of a reception for the Portuguese community, Luis Montenegro did not say whether the government would already change the IRS tables to ensure the reduction approved by parliament would come into effect this year.

“First of all, it is necessary to understand whether the Assembly of the Republic really intends to change the IRS income tax tables from now on. The government will be ready to do so,” he said.

However, he warned that “decisions have consequences.”

“It is one thing for us to decide something from a financial point of view, the consequences of which will have consequences next year. It is another thing to do it with immediate consequences. I would like to know if, in particular, the Socialist Party and Chega, the political forces that determined the approval of this reduction, are in a position to recommend to the government that this be one of the consequences of the approval and publication,” he said.

Asked whether this decision by Marcelo Rebelo de Sousa represents a defeat for the government, he replied: “These considerations do not arise when the President of the Republic has his powers, there are no victories or defeats.”

The Prime Minister began by stating that he respected the decision of both the President of the Republic and the Assembly of the Republic, recalling that some of the diplomas made public on Tuesday came from the government, others from Parliament.

As for the consequences of the disclosure, the Prime Minister believed that “the President himself mentions them when he notes that there are consequences in terms of budget policy for next year and, possibly, for the current year.”

When asked whether the President of the Republic with his decision was not challenging the government and the PS to come to an understanding on these issues, Montenegro stressed that the executive power had already spoken with all opposition parties for the first time last Friday at the fair.

“The government is preparing the state budget, and the state budget has a stage that needs to be discussed, presented within the government and, ultimately, also with some or all of the opposition parties. We are not going to have the discussion in July that the parliament will have in October and November.

However, Montenegro acknowledged that this decision could lead to the preparation of a document.

“This choice is not an indifferent choice, it is not an unimportant choice (…) It is necessary that all these revenues that are no longer collected can either be replaced by other revenues or they can be matched by spending cuts,” he said.

When asked what the government intends to do in this chapter, he limited himself to insisting on the responsibility of the opposition parties: “The government will present the budget. But what is interesting for the country is that whoever pushed for these changes must tell the country. What do you propose in return?

On Tuesday, the President of the Republic announced seven parliamentary decrees on the IRS, including rate reductions, VAT on electricity and the abolition of tolls, five of which were approved by the opposition, while the PSD and CDS-PP voted against.