In the discussion of the State Budget Law proposal for 2026 (OE2026) at the Budget, Finance, and Public Administration Committee in parliament, Minister Joaquim Miranda Sarmento noted that the reversal of State support is a European Commission obligation, considering it a “temporary discount created in 2022,” when at the start of the Ukraine war, a barrel of oil “reached 120-130 dollars, whereas today it is at 60 dollars.”
“The reversal of the ISP discount will always be as gradual as possible, so as not to impact the final price of gasoline and diesel,” assured Miranda Sarmento, when asked by Chega deputy Pedro Pinto whether the reversal would be gradual or if there would be a 100% cut in the discount.
The minister reminded that the discount is temporary by nature and insisted that its elimination will be done “as much as possible,” seeking to “protect the pump price of fuels.”
“Except for Spain, Portugal does not have significantly higher fuel prices than most Eurozone countries,” he stated.
In its opinion on the budget proposal, released on Thursday, the Public Finance Council (CFP) estimates that the elimination of the ongoing ISP discount and the update in the carbon tax, if confirmed, will bring an additional revenue of 1.132 billion euros to the State coffers.
In today’s debate, Miranda Sarmento reiterated that the OE2026 law does not increase any tax, including the ISP itself (whose rates are set by decree within legally defined limits).
“The State Budget law does not increase any tax, nor does it adjust for inflation, as already occurred last year, concerning the so-called special consumption taxes, which include the ISP,” Miranda Sarmento said.
Regarding direct taxes, the minister highlighted that in 2026, the IRS will be lowered again if the parliament approves the OE2026 proposal, which provides for a 3.51% update of the brackets and a reduction in rates from the 2nd to the 5th income brackets, following the decrease in rates from the 1st to the 8th bracket earlier this year.
Regarding IRC, Miranda Sarmento recalled that the parliament has already approved a new reduction of the general rate (to 19% next year).
The reduction in the tax burden “is significant,” within what is possible, given the level of Portuguese public debt, he noted.
