"In view of the budget margin included by the AD Government, the Socialist Party, with this proposal, guarantees households with incomes between the 2nd and 4th brackets, which represent 1/3 of all households, a tax reduction that more than doubles that resulting from the Government's proposal", states the initiative.

The socialists also guarantee that their amendment proposal also reduces "the tax burden in the 5th and 6th brackets, where around 10% of all households are located", recalling that "the higher brackets benefit from the effect of the reduction in the rates of the lower brackets".

Thus, in the 5th bracket, the PS points to a reduction in the marginal rate from the current 32.75% to 32.5% (above the 32% contemplated in the proposal approved by the Council of Ministers), but slightly raises the income limit that fits in this bracket: from the current 27,146 euros to 28,500 euros.

Regarding the 6th bracket - which in the Government's proposal has a reduction in the marginal rate of 3.0 percentage points, that is, it goes from 37% to 34% - the PS project advocates a rate of 36% and a reduction in the upper limit (35,500 euros instead of the 39,791 euros that are in the law and that are not changed in the Government's proposal).

In the following brackets, the PS proposal is to maintain rates and slightly reduce the income limits that fit in each one.

In the calculations presented in the explanatory statement, the socialists state that with their proposal a taxpayer with no children and an income of 1,000 euros gross per month will have an increase in net income of 55 euros per year, while with the Government's solution the increase will be 26 euros per year.

If the salary of this taxpayer (but now with a dependent) is 1,500 euros, their annual income will increase by 130 euros, while with the Government's proposal they will have 65 euros more.

The PS says that this proposal arises from the need to "revisit" the revision of the IRS proposed by the Government and within the contemplated budget margin (348 million euros), so that "tax justice can be reinforced with a greater gain for the middle class and for most families".

In addition, it also proposes "a reinforcement of the minimum existence in order to guarantee more substantial gains for monthly incomes around 1,000 euros", it is stated.

Currently, the IRS tax-free amount (minimum existence) corresponds to the national minimum wage (considering the 14 months of remuneration).

The change in IRS rates is being discussed by parliament on Wednesday, with amendment proposals from other parties already existing.

Read Also: PCP wants to reduce IRS for the first brackets and higher taxation on capital (Portuguese version)

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