Youths will pay "two-thirds less income tax"

The Minister of State and Finance Joaquim Miranda Sarmento stressed this afternoon that the Government has taken on as its main priority the drop in the high tax burden by households and companies, focusing particularly on youths up to 35 years, who will pay two-thirds less in income tax than their current situation.  

In a speech delivered in Parliament during the discussion on the Government Programme, the member of Government charged with Finance recalled that the "heavy tax efforts" on the Portuguese people "hinders the creation of wealth, investment attraction, job creation, and better wages" and that "without better wages, it will not be possible to retain our most qualified people". 

Fostering this wage boost, the Government proposes to move forward with a maximum income tax rate of 15% (except for the last tax bracket) for youths aged up to 35 years, which means "our youths will pay 2/3 less income tax than their current situation". 

This cut is not limited to the younger population. "Within the budgetary margin we have in these four years, we will give priority to cutting income tax rages", the Minister of Finance noted. Please recall that at the start of the parliamentary discussion, the Prime Minister stated that the Government will approve next week an amendment to the Income Tax Code "introducing a cut in income tax rates up to the 8th income bracket", which will "represent an overall cut of around 1.5 billion euros in taxes on the Portuguese people’s work, which is especially felt by the middle classes". 

Corporate tax borne by companies will drop

Companies are another essential axis for the Finance Ministry’s action for the next four years. "Without economic growth and the creation of wealth it will not be possible for companies to pay better wages" Joaquim Miranda Sarmento remarked. Accordingly, the Government proposes to lower corporate tax rates from 21% to 15% in three years.

Measures in an "ambitious yet realistic" programme that intends to improve families’ lives and boost companies’ competitiveness, always "based on a cornerstone": "balanced public accounts".  

 "Budgetary balance and cutting public debt are a prerequisite for sustainable economic and social development", Joaquim Miranda Sarmento stressed. But "maintaining budgetary balance must be based on an economy that is more productive and competitive, one that generates more economic growth", he added.

"This will allow us to reduce the tax burdens, particularly for households and companies while at the same time having the resources to offer quality public services, dignifying the providers’ status and careers", the Minister of Finance concluded.