The new year will bring changes at the fiscal level, some of which, such as IRS rate cuts, will have a smaller-than-expected impact on household budgets with the end of zero-rated VAT and projected price increases.
Continued inflation prompted António Costa’s government to take steps in April to exempt a set of 46 food products from VAT.
The zero VAT basket ends on 4 January (after two extensions) and this end is being contested by consumers, trade associations and distribution companies and involves price increases on these products, most of which are generally subject to the 6% rate of this tax being applied.
However, the new year will bring a few changes at the tax level, namely at the IRS, where there will again be changes to the brackets, by updating their limits (by 3%) and reducing the rates applicable up to the 5th of those brackets. and further increases in the so-called minimum cost of living (the amount of income exempt from the IRS).
The impact of these measures on the IRS should begin to be felt early in the year, at least by workers and retirees, as income tax tables must be adjusted to reflect the IRS reduction.
Young people (18 to 26 years old, or 30 years old in the case of a PhD) will in turn benefit from the strengthening of the so-called “Young Tax Service”, which in 2024 will, for the first time, include a full tax exemption on income received in the first year, up to a limit equivalent to 40 social support indexes.
In subsequent years, the exemption rate was strengthened compared to the model in force until 2023, and the exemption amounts were increased.
Anyone who smokes should expect prices to rise, and the same will happen for alcoholic drinks, which will be subject to tax increases in 2024.
The new year will see several updates to other indirect taxes in line with inflation expected in the 2024 government budget (2.9%), as was the case with IUC rates and the measure that ended up monopolizing much of the budget debate. (25 euro IUC increase in 2024 for vehicles registered before July 2007) will not happen as it has been cancelled.
Updates to indirect tax rates and rates may also bring good news to taxpayers. This is the case with BMI [Imposto Municipal sobre as Transmissões Onerosas de Imóveis]in which in 2024 the value limit up to which there is an exemption from this tax when purchasing own and permanent housing is increased, as well as the upper limits of the following levels.
Author: Lusa
Source: CM Jornal
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