Book wants "greater progressiveness" and a more significant reduction in IRS
The Book intends a more significant decrease in IRS rates in the lowest income brackets and an increase in the last brackets, ensuring a decrease in the average rate in all brackets and a "greater progressiveness".
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País Livre
"With this proposal to change the IRS tax bracket table, all income tax brackets will have their average rate reduced compared to what is in force for the year 2024, ensuring, however, that the gain of the highest brackets does not exceed that of taxpayers with incomes in the intermediate and lowest brackets", can be read in the draft law of the Livre, to which Lusa had access today.
According to the party's proposal, the change "promotes greater progressiveness and tax fairness, while alleviating the effective average personal income tax rate for all brackets except the last bracket".
"This proposal by LIVRE has as its main consequence an increase in the progressiveness of the IRS, measured by the Kakwani index and the EUROMOD Online 3 simulator. The same simulation exercise of the proposed tax reform also allows us to anticipate a reduction in the poverty risk rate", it also highlights.
The table in the draft law proposes a normal rate of 12% for the 1st bracket, followed by 16% for the 2nd bracket, 21.75% for the 3rd bracket and 25% for the 4th bracket.
This is followed by 32.5% for the 5th bracket, 36.75% for the 6th bracket, 43.75% for the 7th bracket, 45.5% for the 8th bracket and 49% for the last bracket.
In the document, the Livre also accuses the Government of having presented "a hoax" about the IRS.
"What the Government proposed was a mere tax cut of around 200 million euros, mainly affecting the highest brackets of the IRS table. The other 1300 million of reduction in the IRS came, after all, from the State Budget for 2024, the responsibility of the previous Government", it stressed.
"The Livre understands that progressiveness is the basic principle of tax justice. The principle that those who earn more income should contribute to a greater extent to the proper functioning of public services, public schools and the national health service is, in itself, one of the foundations of the Social State", it added.
The change in IRS rates will be discussed by Parliament on Wednesday, with proposals for changes from other parties already being presented.
Read Also: Chega presents proposal for IRS exemption up to 1000 euros (Portuguese version)
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