Finance Minister Fernando Medina guaranteed in parliament on Thursday that the Municipal Real Estate Tax (IMI) will not increase next year.
Fernando Medina’s guarantee was given during a parliamentary hearing at the Budget and Finance Committee (COF) on the 2024 state budget proposal (OE2024), when Chega deputy André Ventura was asked about the subject.
“There is no increase in IMI foreseen in OE2024, nor any increase that I can prescribe for the future,” the government official guaranteed.
IMI is levied on the taxable value of rural and urban buildings, with revenues flowing to the municipalities where they are located.
The Finance Minister’s hearing kicks off a series of hearings devoted to the budget proposal, which will be broadly debated in Parliament on October 30 and 31, with the final global vote scheduled for November 29.
The decrease in direct taxes is greater than the increase in indirect taxes
The Minister of Finance also defended this Thursday that the decrease in direct taxes is greater than the increase in some indirect taxes and that there is an absolute relief of 700 million euros.
“The decrease in direct taxes is much greater than the increase in some indirect taxes. The same could be said about VAT, which has a partly compensatory share of social benefits,” he said.
The government official was responding to Chega deputy André Ventura, who accused the government of a “brutal” increase in indirect taxes.
Fernando Medina argued that there is a tax reduction “in absolute value of 700 million euros with the measures being taken”.
The responsible minister emphasized that “the issue of the budget on family income goes beyond the simple tax bill”.
“If we abolish indirect taxes, we are talking about an increase in income of more than 5 billion euros,” he said.
Public investments will be made
The Finance Minister also assured that there will be an acceleration of the PRR next year and guaranteed that public investments will be implemented before 2024.
Medina was answering questions from Social Democratic deputy Hugo Carneiro during a parliamentary hearing at the Budget and Finance Committee (COF) on the proposed 2024 state budget (OE2024).
The PSD delegate questioned the Minister of Finance about the implementation of public investments next year and accused the government of never meeting the investment targets.
“Over the past two years, 2,700 billion euros in public investments remained unimplemented,” the parliamentarian accused.
The government official assured that he is confident that this investment will make progress, justifying this with knowledge of the “implementation cycles of the various community fund programs that Portugal has been applying for decades.”
According to Medina, the beginning of this execution is characterized by a slower pace, followed by an acceleration.
‘What I can guarantee is that all costs necessary to carry out this investment will be reimbursed [público] and associated national components are budgeted. We will not have situations as could hypothetically have happened where we had money to implement and no budgeted national counterparts,” he assured.
The official detailed that of the 9.2 billion euros in public investments planned for 2024, 5.8 billion euros corresponds to national efforts and 3.4 billion euros to European funds.
The post-PRR fund enables reduction of the national debt
Fernando Medina also said that the structuring investment fund for the period after 2026, which consists of the Portuguese public debt, will allow its reduction, thus reducing the country’s debt to the outside world.
‘When the fund was established [de investimento estruturante] Through the Portuguese public debt, we are in practice reducing the Portuguese public debt, because the public debt, from an accounting point of view, eliminates the debt position of the state vis-à-vis the outside world. . “, he said.
The fund, which is being established for the first time in Portugal, was announced by the minister when presenting the budget proposal, for the period after the Recovery and Resilience Plan (PRR).
When questioned today by PSD delegate Hugo Carneiro about the future operation of the fund, Fernando Medina stressed that it “will grow to compensate for the value of the Portuguese public debt”.
“It will also grow with other sources of financing that the state will have in the coming years,” he added, referring to the fact that it will be fueled by part of the revenues from the concessions that will be put out to tender.
Reducing the national debt in the coming government periods will be difficult
Fernando Medina defended the option of reducing the government’s public debt ratio as it will be difficult to do so in the same way in subsequent government terms.
‘With a correct fiscal policy we have succeeded in reducing the national debt ratio [face ao Produto Interno Bruto (PIB)] in a particularly significant and important way,” he said.
The minister argued that he did not believe it was “likely” that there would be “times like these”.
“We have made efforts to reduce the burden of public debt, which will be much more difficult in subsequent government periods,” he stated.
According to Fernando Medina, “with lower growth and lower inflation, the entire debt reduction process becomes more difficult.”
The government expects the government debt ratio to fall to 103% this year and remain below 100% in 2024 for the first time since 2009, according to budget forecasts underlying next year’s budget proposal.
The forecast in the state budget proposal for 2024 (OE2024) points to a government debt of 98.9% next year.
The minister took advantage of the time to respond to the PS faction and responded to PSD deputy Hugo Carneiro’s criticism on this subject.
“Don’t think that inflation and growth alone did their job. They didn’t. Because inflation and growth had Portugal and different countries. The question is what each of them did with the conditions at their disposal,” he said.
The minister emphasized that the weight of Portugal’s national debt has “decreased much more than that”.
“The big difference is that we have not devalued this positive contribution and, given this situation, which we have not identified, we have applied the policies that were appropriate to apply,” he stressed.
Source: DN
