Government will lower income tax rates up to the 8th tax bracket

The Government will approve next week an amendment to the Income Tax Code, "introducing a cut in the income tax rates on income up to the 8th bracket, which will represent an overall drop of around 1.5 billion euros on the Portuguese people’s income taxes, which is especially felt by the middle classes", announced the Prime Minister, Luís Montenegro.

Prime Minister gave a speech opening the Government Programme discussion in Parliament.

Luís Montenegro also announced that the Government will "immediately launch a State paying in 30 days" programme, under which a current account will be set up to offset credits with the Tax Authorities, and between central administration and suppliers, with a view to getting the State to pay within a maximum timeline of 30 days".

European funds

Under European funds, "where we have incredibly low execution rates, of 0.5% for PT 2030 (despite another year in operation) and 20% for the RRF (halfway through the plan’s execution term)", "we must greatly speed up this exceptional opportunity to improve the Portuguese people’s lives".

Noting that "in the 3rd and 4th payment requests to Brussels, the European authorities retained 713 million euros because the agreed targets hadn’t been yet", he stated that "we will create the conditions to present the request to free up that amount in the next 60 days".

"The 5th payment request should have been made yet hasn’t. We shall do so in the next 90 days", he said.

In the Compete 2030 programme "there are applications submitted since July 2030 that haven’t even been appraised yet. It’s been 9 months. Of the more than 3.6 billion euros in applicant investment, only 72 million have been approved", which is "unacceptable". Accordingly, "we shall adopt measures to ensure that the applications are appraised by the end of this year, within a maximum deadline of 60 days, as is in the law and which seems reasonable".

Transparency

The Prime Minister underlined that the Government will "reinforce transparency in applying the funds. Advertising the funds on public service websites is positive but not enough. We have therefore decided to make their publication in the national and local press mandatory".

As such, whoever reads the local papers will learn that funds have been allocated for investment in their regions. Nothing beats information and clarification to fight opacity, which often favours corruption. I am not talking about vague purposes. I am talking about amending the law that is already on the agenda for the upcoming Council of Ministers, he added.

The Government will likewise "boost the means to counter fraud and corruption in applying European funds", and "a joint order has been signed that determines opening the competition to boost by 60% the number of inspectors specialising in this fight. It needs to be done quickly, albeit well".

Income

Luís Montenegro also announced that "in the next 10 days, conversations will begin with the representatives of teachers and law enforcement, with a view to addressing matters pertaining to careers and pay".

"We will also immediately promote scheduling a Social Dialogue meeting to discuss with the social partners the basis for a New Agreement to boost income and productivity for Portuguese workers and competitiveness and growth of our economy", he noted.

Fighting corruption

The Prime Minister also said that "the Government will reach out to the Parliamentary Groups in Parliament tomorrow to Schedule the meetings that will start the dialogue on fighting corruption".

Exams

Furthermore, "as serious flaws have been identified in supplying computers, their maintenance and connectivity at schools so they can ensure all students can sit their exams in equal opportunities this school year (13 639 9th grade students did not get their digital-laptop kit, USB stick and accessories), the Government has decided that exceptionally,  this school year, exams will be sat using paper and the aptitude tests will remain digitally, as set, in order to signal the commitment to the digital transition".

Housing

Luís Montenegro stated that "in the next few weeks and as a way to start correcting mistakes and defining a new housing policy, we will":

- "revoke forced letting".

- "foster access to young people buying their first home, with exemption from paying municipal property tax and stamp duty, and the public guarantee mechanism so they can find a mortgage to cover the full price of their home".

Lastly, "because we need to offer confidence and stability to those who invest in Portugal in the property and tourism sector, we will revoke the major penalties imposed by the previous Government on the Portuguese people who invested in local accommodation, including abolishing additional taxes, the suspicion of licenses and the prohibition of transfer and assignment", the Prime Minister added.