The Finance Minister, Joaquim Miranda Sarmento, confirmed on Thursday that the government will implement a new reduction in IRS taxes, to be applied to September salaries with retroactive effect to January, similar to last year.
“What we did last year, and what we will try to do this year, is very simple: We will approve an IRS reduction of about 500 million, covering up to the 8th bracket, inclusive. That is, only the 9th bracket is directly excluded”, the minister stated to journalists on the sidelines of the Eurogroup meeting in Luxembourg.
Miranda Sarmento stated that the bill will be “taken to Parliament,” but emphasized that the “decision time of Parliament is something that is no longer the responsibility of the government.”
“Once approved – and I am assuming that Parliament will approve – our IRS bill proposal, these 500 million will be fully reflected in an extraordinary reduction of the withholding tax”, he explained.
Recalling that last year’s reduction was implemented in “September and October,” the minister estimated that this year it should also occur “at that time, if the government can get the law approved within that timeframe.”
“If the law is approved later, we will have to do it later”, he noted.
This Thursday, the Correio da Manhã reported on the front page that “IRS drops in September with retroactive effect,” in a model similar to 2024.
According to the daily, the measure is expected to be approved by the Council of Ministers in the next two weeks, but will have to be approved in the Assembly of the Republic in July to be applied to September salaries.
On Tuesday, during the government’s program debate, Prime Minister Luís Montenegro argued that the tax reduction is a “measure of justice” and announced that the government will present the IRS reduction proposal “in the next two weeks.”
Luís Montenegro also assured that during this legislature the government will continue the path of tax reduction, reminding that one of the Executive’s goals is to reduce the IRS up to the 8th bracket by two billion euros by 2029, with a 500 million reduction already in 2025.
The Prime Minister today defended in the Assembly of the Republic that the tax reduction is a “measure of justice” and announced that the government will present the IRS reduction proposal “in the next two weeks”.
It should be noted that, following several IRS changes approved by Parliament last year, new withholding tables with particularly reduced rates were published for September and October to compensate taxpayers for the excess amount withheld between January and August.
During these two months, salaries up to about 1,700 euros gross paid 0% IRS (benefiting taxpayers from the consequent increase in disposable income), and for higher salaries, the withholding was also lower than usual.
