Parliament approves urgent hearing from the Minister of Finance on IRS

The deputies of the Budget and Finance Committee today approved the hearing of the Minister of Finance, Joaquim Miranda Sarmento, regarding the controversy surrounding the reduction of the IRS. Miranda Sarmento’s request for a hearing was presented by Chega and there were no votes against. All parliamentary groups voted in favor, including the PSD, while Livre abstained.

Chega deputy Rui Afonso considered that the reduction in the IRS (Personal Income Tax) proved to be a “very dubious, very ambiguous situation” and that it is “necessary to understand the strategy [do Governo] to the legislature in terms of reducing IRS”. For the PSD, Hugo Carneiro said that the party voted in favor because “it has no problem bringing the Minister of Finance to parliament to give clarifications”, even though today Miranda Sarmento goes to parliament to discuss the IRS, accusing the PS of having tried to stop its rulers from going to the AR when it was Government.

The PSD deputy also said that it is interesting to “check the logic of competition for the leadership of the opposition” and that the PS is now making a proposal to reduce IRS “when it was never interested in going further, as the AD proposed”. For the PS, Carlos Pereira considered that this hearing is useful for the governor to be able to once again “explain to the Portuguese what the objective of the campaign was to present a proposal that was based on the PS”, as the “large reduction in IRS that will happen in 2024 is responsibility of the PS and not the AD”.

On April 12, in an interview with RTP, the Minister of Finance, Joaquim Miranda Sarmento, clarified that the 1,500 million euros of IRS reduction this year announced by the Prime Minister, Luís Montenegro, will not be added to the more than 1,300 million euros of tax relief included in the State Budget for 2024 and already in force. On that day, Friday, Expresso had published the headline “Montenegro doubles IRS reduction by summer”.

Opposition parties then accused the Government of trying to deceive the Portuguese. On Friday night, the director of Expresso, João Vieira Pereira, published a clarification saying that the newspaper published false news, which was made based on the prime minister’s statements and with contacts to sources, but that the newspaper he did not count on “the fact that the prime minister had, in parliament, deceived the Portuguese”.

The Government, in a statement, considered it “true and undeniable” that the reductions in the IRS will lead to a cut of 1,500 million euros compared to 2023 and argued that further reductions in IRS rates would be “budgetally irresponsible”. The executive also said that if “some political or media actors” had supposed there were more IRS reductions, that would only be responsible for them and added that reductions of higher values ​​would be “budgetally irresponsible”.

This afternoon, parliament discusses the Government’s proposal that changes IRS rates with all parties presenting alternatives, with the outcome of the votes being uncertain, taking into account the balance of forces in the Assembly of the Republic. The Government’s proposal, approved by the Council of Ministers at the end of last week, includes a reduction in rates of between 0.25 and 3 percentage points up to the 8th income bracket, with the biggest drops (3 and 1.25 points) to affect, respectively, the 6th and 8th income brackets.

The solution displeased the PS, which accused the Government of focusing tax relief (counted at 348 million euros in 2024) on higher incomes, leading the socialists to move forward with a proposed amendment that focuses the most significant part of the relief on levels lower. Today’s plenary session will also include initiatives from the remaining opposition parties, also within the scope of the IRS.