In 2022, anticipated elections took place, as the parties were not reaching an agreement regarding the State Budget for that year, leading Partido Socialista (PS) to victory, and forming an absolute majority government. Although the 2024 elections were anticipated for other reasons, the Government wants to prevent the Portuguese from heading to the polls again due to a disagreement between the deputies from different parties.

Despite Prime Minister, Luís Montenegro, 's confidence in an “undeniable proposal,” the PS does not agree, and other parties accused the Government of not following every party’s ideology. Pedro Nuno Santos, PS leader, will reunite with the other deputies of his party, on October 8, two days before the deadline for presenting the final document to the Assembly of the Republic.

Suggestions

Luís Montenegro is available to receive suggestions from its main opposition to his party in the Assembly. The principal divergencies in PS and PSD parties are in the measures for IRS Jovem and the relief on IRC taxes. The parties have different ideas regarding the measures for this economic sector, which led Luís Montenegro and the Government to change its core idea for IRS Jovem and IRC.

Regarding IRS Jovem, the Government maintained António Costa’s idea, although changing what was once approved. Luís Montenegro wants to extend the support for every young person until 35 years old, regardless of the education level. Until now, the IRS Jovem was only admitted to people with a degree and now it is suggested to support every person with a maximum of 35 years of age. In the scope of the changes to the previous measure, the Government suggests that young people can enjoy the IRS Jovem for 13 years and not only five, as approved by the socialist Government.

The IRC (Corporate Income Tax) is directly linked to the companies based in Portugal, that pay an amount of money to the State and municipalities, according to the receipts and expenses made by the companies. Currently, the taxation of this calculation is 21%, and by the suggestion of Luís Montenegro, the percentage of taxation should be lowered to 19%, which was not accepted by PS. Then, the Prime Minister agreed to lower the taxation to 20%, a measure that will also be discussed in the Assembly of the Republic.

“Surrender”

The leader of Chega, André Ventura has accused Luís Montenegro and PSD of surrendering to PS, mentioning that the Government is being closed to the central block. Rui Rocha, from Iniciativa Liberal (IL), has also mentioned that the proposals from PS and PSD are hard to distinguish between, as they are both similar.

However, not only the right-wing parties are displeased with the Government’s proposal for State Budget. The International Monetary Fund (IMF) criticises the IRS Jovem measure, considering it dubious and probably not enough to prevent young people from immigrating. The IMF also criticised the IRC measure, believing that the Government should focus on the municipal surtax, lowering it and keeping the general IRC taxation the same.

The other parties

Besides the discussion of the approval of the State Budget being focused on PS and PSD, other parties have shown their opinions about the proposal.

Livre accused the Government of not prompting to present social and ecological measures for the 2025 State Budget. Similarly, Inês Sousa Real, from PAN mentions that the document is contrary to the party's ideology, as there are no measures to protect the animals’ rights. Still, on the left wing, the Communist Party has shown not to be available for negotiations, and Bloco de Esquerda (BE) states that the document does not represent the party ideology, expressing that it would be weird if any left-wing party, except PS, approved the State Budget.

Chega has already stated that will not approve the State Budget, as said in an interview with SIC. The leader of the far-right party accused the Government of not reaching out to Chega to discuss measures, caring only about the PS suggestions.

The President of the Republic, Marcelo Rebelo de Sousa has shown confidence in the approval of the 2025 State Budget, mentioning that the agreement between the executive and Chega should be dealt with between them.

Author

Deeply in love with music and with a guilty pleasure in criminal cases, Bruno G. Santos decided to study Journalism and Communication, hoping to combine both passions into writing. The journalist is also a passionate traveller who likes to write about other cultures and discover the various hidden gems from Portugal and the world. Press card: 8463. 

Bruno G. Santos