“We cannot, all at once, reduce the IRS across the board and with a greater impact on the middle class, reduce the IRC” and move forward with eliminating the state surcharge, which would cost “around 1.8 billion euros”, the Prime Minister stated in Parliament this Wednesday. “We want to reduce taxes, but we cannot jeopardize another objective, which is to have balanced public accounts and to avoid the need for external intervention programs in Portugal again”, he declared.
Luís Montenegro, who was speaking in the State of the Nation debate, was responding to Rui Rocha, leader of the Liberal Initiative, who, in his speech, acknowledged “important steps”, but also many “divergences” and left questions about the aforementioned tax levy, but also about construction licensing, the youth unemployment rate and family doctors for all in 2025.
The Prime Minister highlighted measures such as the IRS Jovem, in which he acknowledged “some differences of opinion” with the IL, but said he was “open to improving this mechanism” with contributions from the parties in Parliament.
“Our simplification and incentive measures to increase licensing will be put to the test next year,” he acknowledged. And “the impact of our policies on reducing youth unemployment is an expectation we have and cannot be achieved in just one calendar year.” As for family doctors, he highlighted the competitions already launched for new entrants.
IRC revenue may even increase
On the opposite side of Parliament, it was the turn of Paulo Raimundo, from the PCP, and Rui Tavares, from Livre, to attack the reduction in IRC and the lack of responses for SMEs.
“The proposal we presented to reduce the IRC has already been tested in Portugal”, Montenegro recalled. “In 2014 there was a 2% reduction in the IRC rate and IRC revenue grew, despite the rate having decreased”. This time “we estimate an accumulated loss of revenue over 3 years of 1.5 billion euros, 500 thousand euros per year, but I will confess here that I hope that what happened in 2014 can be renewed”.
The Prime Minister also reiterated that “the idea that the reduction in IRC is aimed at benefiting large companies is false”, showing the tax statistics: out of 500,000 declarations, 267,000 pay IRC and 160,000 have a taxable income of over 150,000 euros. Furthermore, “SMEs are subject to a lower rate even in our project, of 12.5%”, he stated.
“Anyone who believes that SMEs in Portugal, these 267 thousand that pay IRC, are not available to use the taxes they paid less to invest in new technologies, in paying better salaries, is because they do not know the companies”, he concluded.
Source: www.jornaldenegocios.pt
