The Minister of the Presidency announced today the approval of a draft law aimed at modifying the status of tax benefits to reinforce and operationalize the wage enhancement mechanism.
The regulation, included in the State Budget, proposes an IRC tax exemption for companies that increase workers’ wages above a certain percentage. The government emphasizes the importance of preserving this measure, which was included in the tripartite Social Concertation agreement.
However, António Leitão Amaro pointed out that during the budget’s specialty phase, the agreement was altered, rendering the measure ineffective. Companies eligible for the IRC benefit failed to utilize it due to a parliamentary condition related to the “salary range.”
The focus is on maintaining minimum wage increase thresholds, both for minimum and average salaries. With the mechanism’s relevance diminished due to the regulation, the government seeks to align Portuguese law with the social concertation agreement by removing the salary range criteria.
The government previously attempted to eliminate this condition in the OE2025 proposal, which was rejected, and revisited the issue in February before the government dissolved.
The Minister of Labor at the time underscored the government’s commitment to strictly adhering to agreements made during Wage Concertation discussions.
Additionally, two legislative decrees were approved as part of public finance reforms, aiming for “program-based budgeting” and consistent public expenditure reviews.
The program-based budgeting approach focuses on organizing fiscal management around “public policy programs” aligned with “goals, priorities, and outcomes” to improve rationality and budget processes, as explained by the Minister of the Presidency.
The expenditure review decree ensures “savings” and achieves “balanced accounts” while potentially reducing “tax burdens.”
The government also approved a law transposing the EU directive on the credit transfer between financial institutions.
This law aims to “protect consumers’ rights in credit transfers” among financial institutions, according to Minister António Leitão Amaro.
The legislation also addresses regulations for the credit registry center, though further details were not disclosed.
This directive pertains to the transfer of customer credit between companies, such as when a bank sells a customer’s non-performing loan to an investment fund. The directive’s goal is to enhance consumer protection in these scenarios.
