The government is designing a mega package of measures worth more than €2 billion to help households and businesses cope with the escalation of inflation, most notably reflected in the rise in energy and food prices, Money said. alive. The aid will be approved at an extraordinary council of ministers next Monday and will include the award of a check for 100 euros to families and aid of up to 2 million euros for each energy-intensive company.
The plan has not yet been finalized, because the college first wanted to know the PSD measures, which were presented yesterday. But from what Dinheiro Vivo discovered, the more than 2 billion euros – double the amount foreseen in the social-democratic emergency program – that will be injected into the economy through the resumption of the check for 60 euros intended for families to help bear the costs of energy and food. However, this value should increase by 40 euros to 100 euros, in order to extend – in addition to the beneficiaries of the social minimum benefits and the social energy tariff – to the aggregates of the middle class income classes.
The executive should set a limit to where consumers benefit from support. For this purpose, you can follow the rule that has been used in some social support, to grant the subsidy to all families who cannot take IRS deductions because they are exempt, as the income is not high enough to pay IRS. Pay. This was the rule that was passed for granting an extra check to households that cannot receive an annual allowance of 600 euros per child through social security and the tax authorities, as Dinheiro Vivo reported.
It is recalled that the direct aid of EUR 60 for the most disadvantaged families was paid for the first time in the spring and was extended later in the summer with a new payment of the same amount. In total, 1 million and 70,000 households benefited from this check. The government estimated to spend 128 million.
At the end of August, when the second and final tranche of 60 euros was paid to families receiving the minimum benefits, the Minister of Labor, Ana Mendes Godinho, admitted that a possible extension of this support “would be evaluated in the series of measures introduced in be discussed in September”.
More than 6% increase for retirees
Another aid to be included in this plan is the advance to retirees of part of the increase to which they will be entitled next year, through the automatic update of pensions, calculated on the basis of the average annual GDP growth of the past two years and inflation calculated in November of this year.
In terms of economic growth, it was 4.9% in 2021 and is expected to reach 6.3% this year. The consumer price index, excluding housing, is expected to reach 5.9%, according to Banco de Portugal estimates for the full year. Pension updating rules dictate that an average GDP growth over the last two years above 3% – which should be the case – means an increase above inflation (5.9%) for benefits up to €2659 (6 times the Social Support Index, which stands at EUR 443.2). This means that the large proportion of retirees could increase by more than 6% in 2023.
What the government is investigating is to divide the value of this update over the last quarter of 2022 and the whole of 2023. On the one hand, retirees would already receive a bonus. On the other hand, the national budget for 2023 would not have to absorb all expenditure for these increases.
With regard to companies, the prime minister has already indicated that he will wait until the meeting of the European Union’s energy ministers, scheduled for 9 September, to finalize the package of measures. Also because in some cases the approval of Brussels will even be necessary. This is the case with the increase in aid to energy-intensive industries (ceramics, metallurgy, glass, cement and textiles), which will be included in the government’s emergency plan.
The director, who is currently allocating up to €400,000 per company to help support energy costs, plans to increase the grant amount by €600,000 to €2 million per factory, the DV found.
The state managed to collect more than $5 billion in taxes through July, which is more than $2 billion forecast for the full year 2022.
At the end of last month, the cabinet admitted to increasing this subsidy by 100,000 euros from 400,000 to 500,000. But now the target is more ambitious and needs to be approved by the EU.
The impact of these measures will exceed 2 billion euros, an amount that can be supported by the surplus of tax revenue collected by the State until July. The government estimated a further $3 billion in taxes to be collected this year compared to 2021, but this extra was already over $5 billion in July, largely as a result of price hikes leading to increased payments of taxes to the state. .
Reducing the IRS withholding tax so that the available salary is higher at the end of the month can also be considered. However, if the rates and scales don’t change, taxpayers will be required to pay the same tax next year at the time of filing the IRS return. That is, they now receive more, but then they have to pay the difference of what they have not discounted. Therefore, withholding tax cuts will only have an effective effect if they are combined with changes in IRS rates and levels. However, these changes must be approved by the General Assembly of the Republic. In other words, this question can only be asked in the context of the discussion of the National Budget 2023.
The presentation of the new aid was planned for the end of August, but the government decided to postpone it for a few days. And the Prime Minister, António Costa, doesn’t seem to be bothered by criticism of the postponement or pressure from the President of the Republic, Marcelo Rebelo de Sousa, because “strength comes with peace,” as he said in Mozambique on Thursday.
Source: DN
