The Government, through the Minister of Finance, Fernando Medina, today presented to the General Assembly of the Republic the proposed State Budget for 2024 (OE2024), which will include changes in the field of the IRS tax. However, according to political commentator and member of the State Council Luís Marques Mendes, the reduction in the weight of this tax could exceed the expectations set by the government in the stability program for the period 2023-2027, presented in April this year. The IRS aid “goes well beyond 500 million euros, it will be something on the order of a billion,” Marques Mendes told SIC last Sunday.
If this estimate becomes reality, the government will bring the IRS cut closer to the PSD proposal, which was presented in September with the challenge that it would be adopted before the delivery of OE2024, and is expected to reduce the tax by 1,200 million euro would decrease by the 8th level. The Prime Minister, António Costa, finally justified at the time that this measure would not be accompanied by the PS, since “from 2015 to now” there has already been a reduction in the IRS “by about two billion euros”. .
The scenario for building OE2024
The document that the government is presenting to Parliament today will be discussed in general terms on October 30 and 31. Specialized discussions, culminating in the final global vote, will take place between November 23 and 29. Before this, the context for the creation of the document is known from what the parties discussed with the government at the end of last week.
According to António Cotrim de Figueiredo, deputy of the Liberal Initiative, the forecast for economic growth this year is between 2.1% and 2.2%, above the 1.8% already expected. However, in 2024 this will be around 1.5%. As for state revenues, the government expects a surplus for 2023, below 1%, and neutral in 2024, Cotrim de Figueiredo said. The PAN’s sole deputy, Inês de Sousa Real, added that the inflation rate for this year is expected to be between 4.6%, which contrasts with the 5.1% forecast in the Stability Program.
Taxes, salaries and negotiations
The IRS for Youth, which includes exemption from this tax in the first year of operation and with discounts of 75% in the second and fifth years, and 50% in the third and fourth years, was announced by António Costa in September and should be established framework in the document reaching Parliament today. Also with young people in mind, the government plans to refund the annual tuition fees for everyone who obtains a degree from public universities in Portugal, for each year of the course, which corresponds to 697 euros. This only happens for each year of work in Portugal. This measure is accompanied by the guarantee that all studying children and young people up to the age of 23 will receive a free pass.
In addition, although there is still no certainty about the form, changes will take place in the IRS tables, following the strengthening of the medium-term agreement to improve incomes, wages and competitiveness, which the government signed last Saturday with the social partners have signed. . This document also foresees that the national minimum wage will increase by 60 euros to 820 euros from next year, an increase that the Prime Minister classifies as “the largest annual increase” ever. In this sense, António Costa also guaranteed that the minimum wage, despite its increase in value, would remain excluded from the IRS tax.
As for companies, they will benefit from a strengthening of the tax system for investment support, as well as from the benefits of productive incentives, through an increase in expenditure eligible for the wage costs of employees with qualifications equal to or higher than the level of master , to retain more qualified employees.
During an interview with CNN last week, Costa announced that in 2024 the special tax levy (in IRS terms) for non-ordinary residents will end, guaranteeing, however, that “those who have it” will enforce it.
In response to the rent increases, the government is negotiating with tenants and homeowners’ associations on a middle ground for updating rents, after benchmark inflation dictates that, if nothing is done, the increase in 2013 would be 6.94 % will be. 2024, although the government forecast is 4.6%. However, the Prime Minister ruled out the possibility of reapplying the 2% maximum cap on increases applied this year.
Changes for state workers
The government has submitted a proposal to public administration unions for salary increases ranging from 6.8% as a base, to 3% for higher salaries. This means that the base will be 821.8 euros, close to the national minimum wage, and that salaries up to salary level 24, which corresponds to a salary of 1,754.41 euros, will increase by approximately 52 euros. From this level the increase will be 3%, resulting in higher increases. According to government accounts, the government’s salary bill will rise by 5.1% next year, with the average salary increase for civil servants being 3.8%.
OE2024 will also end the reduction in the value of civil service costs and transport allowances, ending with a cost containment measure that has lasted since 2010. On the other hand, and according to the strengthening of the income agreement, there will also be an update of the subsistence allowances, with the value per kilometer in your own vehicle increasing to 0.40 euros, for national trips to 62.75 euros and for international travel to 148.91 euros.
What can retirees expect from OE2024
In 2024, pensions will be updated based on the formula provided by law – taking into account economic growth and inflation. The inflation reference used will only be known at the end of the year, but the already known consumer price index data allow us to predict increases of around 6%. The Social Support Index (IAS), which serves as a reference for updating various social benefits, will also be increased according to the formula determined by law.
Zero VAT runs until next year
The Council of Ministers in September “approved the extension until the end of the year of zero VAT for 46 essential food products, a measure in force since April and allowing a price drop of almost 10%,” the government said. rack. The justification for this measure, according to the note from the Council of Ministers, is “the success achieved, which has led to an effective and proportionate reduction in the price of the essential healthy food package”. However, it is expected that this measure will also be included in OE2024.
The government promises growth in education
The Minister of Education, João Costa, promised growth in the sector for next year. “Until last year we already had a consolidated growth of 36% in investment and education expenditure and this growth is now continuing, but it will be up to the Minister of Finance to deliver the good news” of OE2024, he concluded. With Lusa
Source: DN
