The decision was announced by the plenary board of the Assembly of the Republic as deputies were preparing to vote on this initiative and another from Chega, also withdrawn by the party, which proposed to extend housing expense deductions in the IRS.
The withdrawal occurred after the PSD parliamentary leader, Hugo Soares, stated, during the debate on the Government’s proposal to reduce the IRS for 2025, that the Social Democratic bench is willing to include a provision in the 2026 State Budget (OE2026) to meet Chega’s proposal.
Chega’s initiative seeks to lower IRS rates from the second to the fifth income brackets more significantly than planned in the Government’s law proposal, which had meanwhile been approved.
Near the debate’s conclusion, Chega leader André Ventura announced that his bench would support the executive’s initiative if it committed to “a 0.3 percentage point decrease from the 2nd to the 5th bracket,” as outlined in the party’s proposal.
In response to this challenge, Hugo Soares opened the possibility of including a provision in the OE, and later, Chega withdrew the project from voting.
The Government’s proposal was approved in general with votes favoring from PSD, CDS-PP, Chega, IL, PAN, and JPP, and an abstention from PS. BE, Livre, and PCP voted against.
Chega’s initiative already foresaw the more pronounced reduction only advancing in 2026, as it stipulated that the decree would only come into effect “following the publication of the subsequent State Budget” to the approval of this bill.
For the second income bracket, Chega proposes an IRS rate decrease to 15.7%, a cut to 21.2% for the third, a drop to 24.1% for the fourth, and a relief to 31.1% for the fifth.
