The government proposes to reduce the marginal rate of the second tier of the IRS, which covers annual taxable income between 7,479 and 11,284 euros, by two percentage points from 23% to 21%. And as a result, the average rate falls at the remaining levels, which could reduce the tax to be paid to more than 2 million households, according to the state budget proposal for 2023.
As stated in the medium-term agreement to improve income and competitiveness, signed this Sunday between UGT and employers’ federations, the government proposes to “update the IRS levels in the reference value of salary increases for 2023, i.e. 5, 1%”, i.e. below the inflation forecast for this year, which should be above 7%, meaning there will be a loss of purchasing power.
These measures will benefit about 3 million households or more than 4 million people who pay IRS and will have a budget cost of 500 million euros by 2023.
See below for the proposed changes to the IRS levels.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
