“The CCP considers the State Budget for 2026 disappointing for companies, as it lacks measures or significant changes with a relevant impact on competitiveness,” the organization stated in a communiqué.
While acknowledging a 1% reduction in corporate income tax (IRC) as a positive step, CCP President João Vieira Lopes pointed out that the upcoming State Budget fails to include a reduction in autonomous taxations, as outlined in the Social Concertation Agreement.
The budget also omits the doubling of the threshold for the reduced tax rate applicable to small and medium enterprises (SMEs).
Regarding personal income tax (IRS), João Vieira Lopes remarked that the 3.5% update for tax brackets does not align with the Social Concertation’s agreement on the fiscal neutrality of wage updates.
On a more positive note, the confederation welcomed measures such as the additional one-year suspension of the mandatory submission of the SAF-T file and the fiscal provisions for plug-in hybrid vehicles.
In terms of public accounts, the CCP highlighted a 4.5% increase in total expenditure.
“The projected 2.3% growth for 2026 is the highest among known projections, with the most significant expected contribution being from domestic demand. This is highly uncertain, as an unfavorable international situation could impact international trade figures, affect the calculation of the nominal GDP, and the value of tax and contributory revenues,” noted the organization.
The government submitted the 2026 State Budget to parliament today, one day before the deadline and three days before Sunday’s municipal elections.
In its macroeconomic scenario, the PSD/CDS-PP government predicts that the GDP will grow by 2% this year and 2.3% in 2026.
The executive aims to achieve budget surpluses of 0.3% of GDP in 2025 and 0.1% in 2026. It estimates a reduction in the debt ratio to 90.2% of GDP in 2025 and 87.8% in 2026.
The proposal will be discussed and voted on generally between October 27 and 28. The final overall vote is scheduled for November 27, following the detailed debate process.
