Portugal's prime minister unveils tax and subsidy package to curb living-cost surge

During Thursday's one outlet's broadcast, Prime Minister Luís Montenegro presented a comprehensive response to Portugal's escalating living costs without altering the VAT rate. The proposal features a tiered pension bonus—€200 for pensions up to €537, €150 up to €1,704 and €100 up to €1,611—payable in December, and a cut to six IRS bands that will also benefit higher brackets due to the progressive tax structure, aimed primarily at middle-income families.

The Council of Ministers approved these measures, which still require parliamentary approval. Fuel-price relief will continue via a tax discount expected to rise to 25 cents per litre, saving roughly €1.3 billion, and a €38 million support package for transport, emergency services and agriculture. Additional steps include maintaining the solidarity bottled-gas scheme and extending the €20-per-month green rail pass to Lisbon and Porto urban areas. Montenegro rejected calls to zero-rate VAT on certain food items, emphasizing fiscal independence from neighboring EU governments.