The issues of the national minimum wage and the reduction in the IRS were addressed by António Costa in the first part of an interview he gave to TVI and CNN Portugal, during which he also confirmed an increase in pensions next year of 6.05%.

“This increase in pensions next year means an increase in pension expenditure of something like two billion euros permanent expenditure for all the following years,” he highlighted.

Regarding the size of a tax cut in 2024, especially IRS, the executive leader noted that the Council of Ministers will have three meetings this week to conclude the State Budget.

“The first phase was the distribution of funds between ministries, and now the main policies will be defined throughout this week”, he said, stating that, from a strategic point of view, the focus will be “on improving income and investment conditions in order to sustain the growth that has been maintained since 2016”.

IRS

Regarding IRS rates for 2024, he said that the updating of the income agreement that was signed last year is being negotiated and “this negotiation will also have an impact on what the measures will be in terms of IRS”.

“I can say the following: for the young IRS, clearly yes, there will be a reduction in rates. Secondly, regarding the general measures, they depend a lot on negotiation with social partners”, he explained.

“Next year, we will certainly maintain the announced trajectory of continuing to reduce the IRS”, he added, before referring to the issue of the minimum wage for 2024.

Minimum wage

“There is a proposal from UGT that the increase in the minimum wage next year be higher than what is foreseen in the agreement, 830 euros. Today I saw statements by engineer Vieira Lopes, president of the Confederation of Commerce - who is currently leading the group of employers' confederations - saying that on the part of the employers' confederations there is openness to discuss increasing the minimum wage. And, therefore, we are currently in dialogue in social consultation”, he said.

When asked about the CIP proposal for a 15th month, as long as it is free of taxes and contributions, António Costa claimed that this proposal is more complex.

However, for the Prime Minister, “if employers are available to discuss a 7% increase, if employers are available to make a higher increase than what is expected, then there can certainly be an approach to something, for all, which corresponds to a 15th month”.