Cuts to income tax: experts back the measures but warn situation in Portugal may worsen
A cut in income tax and pension bonuses bring some relief amid inflation and clawback measures, but global conditions may yet make matters worse.
This Thursday, Portugal's government will decide to give pensioners an extra 100-200 euros and reduce income tax brackets, costing up to 400 million euros. Prime Minister Luís Montenegro said the income tax cut aims to support the middle class, with families already struggling. The previous day, diesel and petrol prices in Portugal reached record highs, sparking protests.
Economist João Rodrigues dos Santos supports the measures but prefers a more structural approach to budget policy. Tax lawyer Tiago Caiado Guerreiro agrees with the windfall return to taxpayers but criticizes the method. Both experts agree Portugal's taxes are too high and advocate simplification of the tax system. The opposition has proposed VAT cuts, but tax experts warn this is technically difficult and may require EU authorization.
The European Central Bank recently raised interest rates, raising concerns about the international economic climate.
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