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“Fewer taxes”. AD won, but what it promised with impact on the wallet

The coalition of PSD/CDS, known as AD, emerged victorious in the early legislative elections held on Sunday, securing 86 seats in the parliament. This marks an increase of 10 seats from the previous elections in 2024, with results from overseas constituencies yet to be finalized.

What measures impacting the finances of Portuguese citizens has AD promised?

The AD’s electoral program for the 2025-2029 legislature outlines a blend of continuity and innovation, addressing underlying issues and adjusting to heightened international tensions and instability, as explained in their official document.

Among several “emblematic measures” highlighted by the coalition, the following ten have been underscored:

  1. Reduced taxes on labor, especially for the middle class: A reduction of 2 billion euros in IRS, with 500 million euros being cut in 2025, targeting reduced fiscal pressure on income, especially for the middle class, and promoting savings.
  2. Increased income: A minimum wage of 1,100 euros and an average salary of 2,000 euros, ensuring no pensioner earns below 870 euros.
  3. Enhancing the quality of life for the elderly: Continued pension appreciation, raising the Solidarity Supplement for the Elderly to ensure no pensioner earns below 870 euros, complete exemption in medication purchases, and an Active Aging Program.
  4. A country for the youth: Continuing new measures to retain young people, including reduced IRS for young individuals, exemption from Property Transfer Tax (IMT) and Stamp Duty, and public guarantee in first home purchases.
  5. Ensuring sound public finances: Continuing to secure slightly positive budget balances and a healthy reduction of public debt, lowering taxes while valuing public workers and investments.
  6. Increasing housing: Expanding construction, rehabilitation, and rent, easing construction rules and licensing, reducing taxes to boost supply. Implementing 59,000 public houses at affordable prices and providing funding for more municipal projects.
  7. Guaranteeing childcare and preschool for all children: Contracting up to 12,000 preschool slots in identified need areas.
  8. Valuing public workers: Completing career reviews by 2027, recognizing merit and qualifications, and investing in performance awards.
  9. Making work financially rewarding: Ensuring beneficial social support and tax regimes for those who work.
  10. Focusing on businesses to accelerate economic growth: Cross-cutting reduction of corporate tax (IRC) with a gradual decrease to 17% (and 15% for SMEs), simplifying tax procedures, speeding up tax justice, boosting exports, strengthening support for companies amid international tensions, and enhancing activity and investment in inland territories.

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