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Parliament approves the relief of the IRS with the rate reduction proposed by PS – Economy

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After a turbulent ad hoc process, the Socialist Party's final text was approved with votes against the Social Democratic Party and the CDS-PP (the parties supporting the government), with Chiga abstaining and voting in favor for the remaining parties.

Parliament on Wednesday approved in a final global vote the PS project that lowers IRS rates up to the sixth income bracket, as well as the PSD and CDS-PP projects on modernizing the brackets.

After a turbulent ad hoc process, the Socialist Party's final text was approved with votes against the Social Democratic Party and the CDS-PP (the parties supporting the government), with Chiga abstaining and voting in favor for the remaining parties.

The Socialists were able to obtain approval for a new schedule for the Tax Authority, where the rates applied to the various brackets range between 0.25 and 1.5 percentage points compared to those currently in effect – and in the lower brackets, this new reduction adds to what has already been implemented in the state’s general budget for the year 2024. (OE2024).

Thus, the rates for the first and second levels decrease, respectively, from 13.25% to 13% and from 18% to 16.5%. In the third step, the reduction is made from 23% to 22%, and in the fourth step from 26% to 25%.

In the fifth and sixth tranches, where current interest rates are 32.75% and 37%, the rates drop to 32% and 35.5%, respectively.

At the remaining levels, there is no scope for reducing fees, contrary to the government's initial proposal and what the Public Security Directorate and CDS-PP defended in the alternative text.

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The new rates will take effect this year and their impact will also reach the pockets of workers and retirees this year as they will be reflected in the new IRS withholding tables.

Among the changes to the IRS approved today is also a proposal from the PSD and CDS-PP – an alternative text after the law proposed by the government – which considers creating a mechanism to update the limits of income brackets taking into account arithmetic inflation and growth. Economic, calculated in the third quarter of the year prior to the entry into force of the State General Budget Law.

The measure was given the green light with Livre voting against it and Chega, PCP and BE abstaining, while the rest voted in favour.

The measure stipulating that the government will evaluate the extent to which the deduction of interest charges on debts contracted under housing credit contracts will be extended was also approved and was also included in the proposal signed by the AD coalition.

As we have already seen in the votes in the Committee, the MPs also made viable a proposal from the Left Bloc calling for updating the specific deduction (which has been “frozen” at €4,104 for several years) of income from work and pensions in the Index of Social Support (IAS) update rate. .

In today's votes, an increase in the minimum presence was also approved, a measure included in the Socialist Party project and also in the one presented by the PSD and the CDS-PP.

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