Government plans to give double tax break on salaries over €3,500 gross/month

The government’s plan to reduce IRS by €500 million this year will give a double bonus on salaries between €3,500 and €7,000 gross per month.

This would be in the case of a single childless person and achieved by reducing taxes in the 7th and 8th tax brackets by alleviating tax on lower income brackets which, because tax is progressive, would also benefit those with higher salaries.

The effects will come into force this year and be retroactive to January through a cut in the amount of tax retained at source on a monthly basis.

The policy, which will be approved within two weeks at a meeting of the Council of Ministers, will still have to be approved by the Portuguese parliament.

The tax bill proposes a reduction in IRS taxes up to the 8th tax bracket and was presented a year ago by the PSD/CDS coalition, but had been thrown out by the PS Socialist Party and far-right Chega.