Portugal's Finance Minister, Mário Centeno, said as from January next year, the income tax surcharge will be abolished.
In an interview on RTP3, the minister, recently dubbed the Ronaldo of Finance, stated, "In January 2018 no one will pay the IRS surcharge,” adding that there are a series of additional measures being worked on to ensure the lowest earners will see a reduction in their ‘fiscal burden.’
"We have a commitment to fiscal stability that is linked to the possibility of reducing the overall tax burden. This happened in 2016 and will happen again in 2017. This tax burden has been changing, the weight of direct taxes has shifted to indirect taxes so we are able significantly to relieve the direct tax burden for families in 2018 - what's left of the IRS surcharge will disappear."
The government envisages tax relief of €200 million for the lowest earners next year, a measure that already is in the Stability Programme.
The minister is not so keen to reduce the tax burden for companies, one of the previous Passos Coelho government’s few achievements.
As for the country’s international rating, "We have been in constant contact with the rating agencies and almost all of them now evaluate the fundamentals of economic growth and the productive capacity of the Portuguese economy at a level clearly above junk status. But the adjustment process and the difficulty the economy has had in gaining credibility has led these agencies to hold their ratings to below investment grade."
Mário Centeno believes that the exit from the Excessive Deficit Procedure will allow Portugal’s rating to improve when the next ratings are published at the end of the summer and in early 2018.
Clearly on a roll, the finance minister was asked about the country’s public debt level of well over 130% of GDP. Centeno said that, if the Portuguese economy maintained its current growth rate, the ratio of public debt to GDP could fall to 100% in ten years time. This now is the government’s objective.
