The measure is part of a social package of 2,400 million euros approved this Monday
The Portuguese Government will also reduce VAT on electricity and limit the increase in rental prices in 2023
The Portuguese Government presented this Monday the first great social support package to help families combat rising inflation. A package valued at €2.4 billion and whose main beneficiaries are pensioners. The Socialist Prime Minister Antonio Costahas announced an extraordinary increase in 50% of all pensions in the month of October, which will be added to direct aid from 125 euros for all people with gross monthly income of less than 2,700 euros, with a supplement of 50 euros for each child under 24 years of age. Costa has explained that these payments will be made in a single way, although the Portuguese government has also approved long-term measures.
Among these measures is the reduction of VAT on electricity from 13% to 6% starting next month and until the end of 2023. A measure that must be approved before in Parliament, but that will have enough votes thanks to the comfortable absolute majority that the Socialist Party has after the January elections. The legislative chamber must also approve the increase in pensions of between one 3.53% and 4.43% in 2023, another of the proposals raised today by Costa. “Pensioners will see their purchasing power lost throughout this year fully restored,” assured the Prime Minister, who added that these increases guarantee the sustainability of Social Security and do not alter the objectives of reducing the deficit and the public debt.
rental protection
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The Portuguese Government has also decided to limit the increase in rental price at 2% from next year, far from the maximum allowed by law, of 5.7%. The Executive plans to compensate the owners with deductions in the income tax (IRS) and in the corporate tax (IRC) so that they are not harmed by this limitation. Added to this measure is the freezing of the price of public transport tickets starting next year and the renewal until the end of 2022 of the reduction in fuel taxeswhat do they suppose discounts between 14 and 16 euros for every 50 euros refueled with gasoline and diesel, respectively.
Portugal has been one of the last european countries in announcing a social aid package to combat the effects of inflation. Something that Costa has defended despite criticism. “This package of measures has arrived when I said it would arrive. I said that we would approve it in September because it was very important to be certain that we were in a position to be able to return this amount, 2,400 million euros, to Portuguese families, without this putting jeopardize our debt and deficit reduction goals.