Portuguese PM: a relief in Personal Income Tax implies an increase in taxes

  • ECO News
  • 27 September 2017

The Portuguese PM gave a warning: going beyond what the Government is proposing for IRS will imply an increase in other taxes. It also leaves less room removing career promotions' freeze.

The Portuguese PM António Costa made a warning this Wednesday to his coalition partners (Communist Party – PCP, Left Block – BE and the Greens): in case there is a tax relief in IRS (Personal Income Tax) brackets, other taxes will have to be increased or the growth in expense will have to be smaller. “A Budget is a puzzle and the pieces have to fit in”, the PM summarized in an interview to the Portuguese newspaper Correio da Manhã. In addition to having more taxes, Costa warns against the fact that this measure could also limit the progressive removal of the civil servants career promotions’ freeze.

“If we go too far in reducing the IRS invoice, either we increase other taxes or we rein in expenses”, the PM assures, while mentioning that “the priority is to improve a fair taxation by dividing smaller income brackets”. In addition, Costa states that if tax revenue decreases because of IRS, then there will be “less room to progressively remove the civil servants career promotions’ freeze”.

"If tax revenue decreases because of the change in IRS brackets, then there will be less room to progressively remove the civil servants career promotions’ freeze.”

António Costa

Portuguese prime minister

As for pensions, António Costa only assured an update will exist, not disclosing if the 2018 State Budget will meet the Left’s expectation of a new extraordinary increase as the one introduced in the 2017 State Burget.