In a political statement at the Assembly of the Republic, PSD vice-president Hugo Carneiro argued that the Government’s proposal, to be debated and voted on in generality on Friday, must be viewed in the context “where the State has made five changes in the lower brackets since 2018”.
“It’s now important to also consider those who, accounting for about 15% of middle-class households, bear 45% of the IRS settlement, that is, those in the sixth to eighth brackets who are not rich”, he emphasized.
For Hugo Carneiro, these taxpayers “were forgotten in the past by the PS” and it is now essential to reduce IRS rates up to the eighth bracket while excluding the ninth.
The social-democratic deputy also addressed doubts raised by the PS, saying that the AD is committed to maintaining healthy public accounts with this reduction.
According to the Government’s IRS relief proposal, to be applied this year with a total value of 500 million euros, there is a reduction of 0.5 percentage points from the 1st to the 3rd brackets; a decrease of 0.6 percentage points from the 4th to the 6th; and a reduction of 0.4 percentage points for the 7th and 8th brackets.
From Chega, which has already advocated for greater reductions in the lower brackets, Deputy João Ribeiro agreed with the tax reduction but urged the Government to increase deduction values, challenging the PSD to clarify whether they want to talk with Chega or the PS on this issue.
Former Secretary of State for Fiscal Affairs António Mendonça Mendes accused the AD (PSD/CDS-PP coalition) of using tricks in tax matters and contested the PSD deputy’s view that there was a decrease in tax burden last year.
“The results of the AD’s fiscal policy can be assessed: after the IRC reduction was approved, the first quarter of 2025 was the first time foreign direct investment decreased since the pandemic, and GDP fell by 0.5% sequentially”, he criticized.
IL deputy Mário Amorim Lopes brought a ceramic piggy bank shaped like Karl Marx’s head to the debate, which he dubbed “Carlitos,” to demonstrate that for some workers, the IRS savings proposed by the Government will mean a reduction of only four euros a month, which he considered “a microscopic step for taxpayers”.
In response, Hugo Carneiro said he expected a better investment of the savings from IL and joked that Amorim Lopes “was naughty” for choosing an example of a worker with low income.
Further to the left, Livre deputy Rui Tavares lamented that the tax debate always focuses on IRS reductions rather than VAT, noting that Portugal’s standard rate has been 23% since 2010, “above the European average”.
In the same vein, PCP deputy Alfredo Maia accused the Government of wanting to benefit the wealthy more than the average population and challenged PSD/CDS-PP to instead lower VAT on electricity, gas, and telecommunications.
BE’s sole deputy and coordinator Mariana Mortágua also accused the executive of prioritizing “privilege over tax justice” and urged the approval of the party’s proposal to restore the ability to deduct interest on housing credit loans.
For CDS-PP, parliamentary leader Paulo Núncio argued that the two parties that made up the AD “are the parties of sound public finances and budgetary stability”.
“Throughout our history, we’ve never led to bankruptcy and several times have had to save the country”, he stressed.
