The Parliament began the debate and voting on the State Budget for 2026 (OE2026) on Thursday. The discussion is set to continue for five days, with a final vote on November 27. Some measures have already been approved, while others have been rejected.
Parties submitted 2,176 amendment proposals by the deadline. According to the Parliament’s page, the PSD/CDS-PP submitted 57 proposals, Chega 614, PS 117, Iniciativa Liberal 112, Livre 330, PCP 532, Bloco de Esquerda 182, PAN 182, and JPP 50.
Notable amendments include proposals related to pension increases from nearly all parties and the end or exemption of certain tolls.
The first day concluded with 30 amendments approved, including 21 from the opposition, with PS leading this group with seven measures.
What has been approved?
- IRS reduction for the 2nd to 5th brackets
The Parliament approved the reduction of IRS rates for the 2nd to 5th brackets next year, with no changes from the original State Budget proposal. The reduction received support from PSD, CDS-PP, Chega, IL, and Livre, with PCP voting against, and PS and BE abstaining. - Support for victims of violence
The Portuguese Communist Party’s (PCP) proposal to increase funding for the national support network for domestic violence victims was the first amendment approved in the specialty phase. - School rehabilitation
The Parliament approved a PS proposal to allocate budget funds for municipalities to rehabilitate schools. With this proposal, the Government is authorized to make necessary budget changes to ensure transfers to local municipalities for the School Recovery and Rehabilitation Program. - Inclusion of domestic violence victims in Porta 65+Three PAN amendments were approved, including the inclusion of domestic violence victims in the Porta 65+ program and the ability to report offenses via the Electronic Complaint Portal.
- Reinforcement of researchers’ labor rights
The Parliament approved a proposal by the Bloco de Esquerda to create a work contract model that strengthens the labor rights of researchers. - PCP proposals for security forces
Two PCP amendment proposals for security forces, specifically setting a deadline for payment to professionals of the Public Security Police (PSP) and the National Republican Guard (GNR), were approved. - Paid internships for Teaching Master’s students
Teaching Master’s students who engage in supervised teaching internships will now be paid. This socialist initiative aims to enhance practical classroom learning. - 2026 pension supplement (dependent on public accounts)The PSD and CDS-PP’s proposal for the Government to pay a 2026 extraordinary supplement to lower pensions, contingent upon the public accounts evolution, was approved. The Government is committed to pay this based on budget execution trends in revenue and expenditure in the coming year.
- Funding for homeless housing projectsPAN’s amendment to guarantee funding for housing solutions for the homeless, focusing on the ‘housing first’ program, was approved.
- Increase in supplement for veteransThe PS proposal to increase the special pension supplement for veterans was approved in the State Budget specialty phase, with half of the increase set for 2026 and the other half for 2027.
- IRS deduction of VAT on books, concerts, theatre, and museumsThe Parliament approved a PS proposal allowing taxpayers to deduct part of the VAT on book purchases and cultural events tickets from their IRS starting in 2026.
- IRS exemption on volunteer firefighter compensationsThe Parliament approved proposals from PSD/CDS-PP and PS for IRS exemption on compensations and subsidies for volunteer firefighters paid by fire departments and humanitarian associations.
- 5% IRC in Madeira’s Free Trade Zone until 2033The extension of Madeira’s Free Trade Zone tax rules until 2033 was approved, allowing licensed companies to benefit from a special 5% IRC rate until that year.
- Increased support for assisting a child with chronic illnessThe increase in support for assisting a child with a disability or chronic illness, as well as in cases of oncology conditions, was approved following an amendment proposal by PSD and CDS-PP.
- Increase in allowances for MNE staff abroadA PAN proposal for the Government to increase the allowances for Ministry of Foreign Affairs staff abroad in 2026 was approved. Initially rejected, it was approved later in the day when parties corrected their voting intentions.
What was rejected?
- Increase in meal subsidy for state employeesProposals from Livre, PCP, and Bloco de Esquerda for increasing the meal subsidy in Public Administration next year were rejected. Livre proposed raising it from the current six euros per day to 11 euros in 2026. Meanwhile, PCP and BE suggested increasing it to 12 euros per day.
- Ban on public funds for mosque constructionChega’s proposal to ban public funds for mosque construction was rejected, with CDS-PP and PAN abstaining, Chega voting in favor, and the rest voting against.
- IRS deduction of mortgage interestThe Parliament rejected opposition proposals for homeowners who purchased property since 2012 to deduct part of loan interest in IRS.
The proposal was approved in generality on October 28
Recall that the Government submitted the OE2026 to Parliament on October 9, a day before the deadline and three days before the municipal elections.
In the macroeconomic scenario, the PSD/CDS-PP Government forecasts GDP growth of 2% this year and 2.3% in 2026. The executive aims for surpluses of 0.3% of GDP this year and 0.1% next year. As for the debt ratio, it is projected to decrease to 90.2% of GDP in 2025 and 87.8% in 2026.
The proposal was approved in generality on October 28, with supporting votes from PSD and CDS-PP, abstentions from PS, PAN, and JPP, and against votes from Chega, PCP, IL, Livre, and BE.
