The tax reform presented by the PSD in mid-August, which aimed at easing the burden of the IRS, is failing to reach most people and meet its objective of competing with a “niche party” such as the Liberal Initiative, and not with the PS. , which would be the expected target. This is the perspective of political scientist Jorge Fernandes, who analyzed the social-democratic proposal presented at the party’s comeback, which was criticized by opponents for being too low or too high.
“The parties, when defending an issue, are seen as the owners of the measure,” Jorge Fernandes explained to DN, adding that it was the Liberal Initiative that brought taxes into the political debate in Portugal. Therefore, for the political scientist, this strategy is not a winner if the goal is to attract voters. “The average voter is most concerned about the National Health Service [SNS] than with taxes. The average voter, who lives in a suburb and earns a thousand euros a month, is more concerned with public transport,” he continues. The PSD also presented a proposal to review the SNS at the beginning of July, which is a lot for Jorge Fernandes. more difficult to convey “medially”. This kind of proposal, the PSD,” says the researcher from the Institute of Social Sciences (ICS) of the University of Lisbon, “is becoming a niche party, and that is what the Liberal Initiative is”. the proposal does not benefit the social democrats, it does not carry the weight on the wallets of the Portuguese that PSD president Luís Montenegro said it would have. Portugal,” said Jorge Fernandes. But the idea put forward by Montenegro also concerned young people up to 35 years old, who, if subjected to the control of Parliament and the absolute majority of the PS, would benefit them could come up with a reduction of the IRS by two thirds: “If young people benefited from this type of proposal, it would mean that young people earn 2,800 or 3,000 euros per month. Which young people in Portugal fall into this income category? They are an absolute minority” concludes the political scientist.
In the changes in the taxation of young people’s income, which the PSD puts forward, the perspective of tax inspector Luís Leon coincides with that of the ICS researcher. “Unfortunately, the problem for young people is not the IRS,” explains Luís Leon, arguing that “young people entering the labor market receive low salary proposals and many of them don’t even pay taxes.” According to the tax officer, “the problem of the young people is that we have an economy of micro, mini and nano companies, which make up more than 90% of the Portuguese business fabric”, which compete with “large, profitable companies, which generate added value. , who play on the global market and manage to pay higher wages”. In this context, “this skilled workforce is emigrating in a global economy. It’s doing the same as the lower-skilled workforce of the 1960s and 1970s. And they don’t emigrate because they have a lot of pay taxes, but because they reach companies and the world.” the salaries proposed are much lower than those in the European Union,” concludes Luís Leon.
To balance the balance in the analysis of the PSD’s fiscal reforms, economist João Duque argues that “cutting taxes a little is an important principle” and even “there is scope to do that”, since “it is much more demands than expected. ” and “the execution of the budget is well above what was foreseen”. And if this is last year’s scenario, according to João Duque, “we can seize the opportunity to pay off debt or reduce taxes”. Given the three main sources of tax revenue for the state, between IVA, IRC and IRS, the latter has the greatest potential to be changed, the researcher says. “VAT is a more controlled tax in the European Union, it is a common tax “, which means that fewer decisions have to be made internally, the professor adds. With regard to the IRC, João Duque’s criticism is that the government has not kept its promises about this tax. Therefore, there remains room to reduce the IRS burdens for families even if people on lower incomes don’t pay them, but, the economist recalls, “a doctor who earns 5,500 euros a month is at the top of the ladder”. asks João Duque.
Five measures to lower the IRS
Reduce marginal IRS costs The first measure of the PSD tax reform, presented by Luís Montenegro at Festa do Pontal, is the reduction of the IRS charged by the state by 1,200 million euros.
Young people pay only a third of the IRS The reduction of personal income tax for young people up to the age of 35 returned to the social-democratic agenda.
reward productivity Montenegro has proposed increasing productivity by exempting companies from the single social tax by paying premiums to workers who produce more.
Inflation affects the IRS With the loss of household purchasing power due to price increases, PSD wants to update the IRS based on inflation.
regulate tax revenues For Montenegro, the state can only spend the excesses of tax collection if approved by parliament.
Source: DN
