The government’s proposal to reduce IRS tax rates by 500 million euros this year was approved in Parliament on Friday. This confirms that the tax will be reduced for those earning up to 6,297 euros.
According to DECO PROTeste, this adjustment involves a reduction of the income tax in the first eight brackets.
“Parliament has already approved a decrease in the IRS between 0.4% and 0.6% in the first eight brackets. The government’s proposal still needs approval in detail by the Assembly of the Republic, but it anticipates a tax relief of 500 million euros in the coming months,” explained the consumer protection organization.
The government’s proposal to reduce IRS tax rates by 500 million euros this year was approved today in Parliament.
Lusa | 15:46 – 04/07/2025
What does the government’s proposal entail?
According to the government’s proposal, the rate of the first bracket drops from 13% to 12.5%, the second from 16.5% to 16%, the third from 22% to 21.5%, the fourth from 25% to 24.4%, the fifth decreases from 32% to 31.4%, the sixth changes from 35.5% to 34.9%, the seventh shifts from 43.5% to 43.1%, and finally, the eighth reduces from 45% to 44.6%.
The rate for the highest income bracket remains at 48%.
Although there’s no change in this final step, the proposed IRS reduction covers all taxpayers due to the progressive rule of the table.
The reductions in earlier brackets result in benefits for taxpayers in the new bracket.
The Chega party has proposed lowering the second bracket’s rate to 15.7%, cutting the third bracket’s rate to 21.2%, reducing the fourth bracket’s rate to 24.1%, and decreasing the fifth bracket’s rate to 31.1%. Their initiative suggests implementing these additional reliefs in 2026.
During today’s debate, Finance Minister Joaquim Miranda Sarmento called for “responsibility” from opposition parties to ensure that the reduction reaches taxpayers’ pockets as soon as possible.
For taxpayers to feel the relief, new withholding tables must be approved by the Ministry of Finance, which the minister assured would be done by the government.
Joaquim Miranda Sarmento argued that the reduction should be reflected “as immediately as possible” to hasten the tax refund to taxpayers, so families “do not have to wait” for the IRS settlement the following year.
The government’s proposal goes before the Assembly of the Republic on Friday, July 4. If approved, it could apply to those earning up to 6,297 euros, as it “anticipates a reduction in marginal rates up to the eighth bracket, meaning incomes up to 83,696 euros.”
Notícias ao Minuto com Lusa | 08:37 – 02/07/2025
