Latest news and stories about tax reduction in government in Portugal for expats and residents.
The Council of Ministers has approved a proposal to reduce personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS), which now moves to Parliament for debate. Simulations from consultancies indicate that while all income levels will see some reduction, the impact is most significant for intermediate tax brackets. The government aims to return approximately 400 million euros to taxpayers through these changes.
The Portuguese government is set to roll out a new income tax reduction beginning this November. The adjustment aims to provide financial relief to taxpayers through updated withholding tax tables.
Prime Minister Luís Montenegro announced a reduction in income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) for the first six income brackets, effective this November. Additionally, the government will provide an extraordinary supplement to pensioners receiving up to 1,611 euros. These measures, valued at 400 million euros for tax relief, are expected to be approved by the Council of Ministers this Thursday.
Update: Parliament rejects no-confidence motion against government
Parliament has officially rejected a no-confidence motion brought by the Chega party against the government. Despite the political tension, Prime Minister Luís Montenegro successfully defended his administration's stability, while the government confirmed that the Minister of Internal Administration will remain in his position.
Luís Filipe Montenegro Cardoso de Morais Esteves (born February 16, 1973, in Porto) is a Portuguese lawyer and center‑right politician who has served as Prime Minister of Portugal since April 2, 2024. A long‑time member of the Social Democratic Party (PSD), he is the leading figure of the post‑Troika generation of Portuguese conservatives. Montenegro was elected to the Assembly of the Republic in 2002 for the Aveiro district and remained an MP for 16 years, becoming PSD parliamentary leader from 2011 to 2017 during the bailout and austerity period under Prime Minister Pedro Passos Coelho. He was a prominent defender of strict austerity measures, arguing in 2014 that “the life of the people is no better, but the life of the country is a lot better,” a phrase that has followed his public image since. After an unsuccessful leadership bid against Rui Rio in 2020, Montenegro won the PSD leadership in 2022. He then forged the centre‑right Democratic Alliance (PSD–CDS‑PP and allies), which won a plurality of seats in the 2024 legislative election. Refusing to partner with the far‑right Chega, which he has called “often xenophobic, racist, populist and excessively demagogic,” he formed a minority government as head of the XXIV Constitutional Government on April 2, 2024. His first government fell in March 2025 after a no‑confidence vote linked to a conflict‑of‑interest affair, but fresh elections saw the Democratic Alliance increase its seat share, allowing Montenegro to return as prime minister leading the XXV Constitutional Government. His importance to Portugal lies in attempting to re‑center the traditional centre‑right after the crisis years, defending liberal‑conservative economics and EU alignment while drawing a sharp line against formal cooperation with the radical right, thus shaping how Portuguese democracy manages its new multi‑party era.
André Ventura, born January 15, 1983, is a lawyer, academic, and Portugal's most prominent far-right leader. He founded Chega ("Enough") in 2019 after his PSD mayoral campaign attacked the Romani community. Chega surged from 1.3% in 2019 to 22.8% in May 2025, becoming parliament's second-largest party and making Ventura Leader of the Opposition.
His platform emphasizes immigration restrictions, law-and-order policies, constitutional reform, and contains inflammatory anti-Romani rhetoric that has triggered multiple discrimination convictions and investigations. Politically classified as far-right by international media, Ventura cultivates alliances with European far-right figures including Marine Le Pen and Santiago Abascal.
The Portuguese government has decided to maintain current ISP tax reduction levels on diesel and petrol for the upcoming week, despite forecasts of a decline in fuel prices.
The President of the Republic, António José Seguro, has promulgated the diploma that amends the Personal Income Tax (IRS) code and reduces the rates applicable to the first six income brackets. The President of the Republic has promulgated as Law the Decree of the Assembly of the Republic no. 113/XVII, which authorizes the Government to...
The law is effective from June 30 to December 31, 2026
IRS withholding will be cut by half next month, both on salaries and Christmas bonuses. Furthermore, André Ventura accuses Luís Neves of wanting to manage the Ministry of Internal Administration in the same way he managed the PJ.
The proposed 2027 State Budget includes reductions in IRS and IRC taxes, alongside a rise in the national minimum wage.
According to Joaquim Miranda Sarmento, the 2027 State Budget will mark the sixth tax relief measure implemented since the PSD and CDS-PP took office two and a half years ago.
Home News Fuel stations in Portugal to show how much tax reduction saves per litre Fuel stations in Portugal to show how much tax reduction saves per litre Under a new Government requirement for petrol stations in Portugal, drivers will soon be able to see how much they are saving in fuel taxes e
An IRS tax reduction is good news. More revealing is the way an annual saving is transformed into an event concentrated in the November salary.
The Municipal Assembly approved the tax package for 2027. However, it was the PS motion regarding the Central Administrative Court of the Centre that sparked the most intense debate of the session.
The Prime Minister announced several previously mentioned measures this Thursday and defended the Government's choices, avoiding 'excessive voluntarism'. In addition to the pensioner supplement and the reduction of income tax up to the 6th bracket, the expansion of the green rail pass and further support for sectors most exposed to fuel price increases were also announced.
The government approved, in the Council of Ministers, a reduction in IRS tax rates between 0.3 and 0.5 percentage points for the first to sixth tax brackets. A single person with no children and a salary of one thousand euros recovers 12 euros.
The Prime Minister highlights the reduction in IRS income tax that will be approved this Thursday at the Council of Ministers.
The Somos Todos Cidadãos movement, which leads the municipal executive, stated that this is the first time the council has adopted these mechanisms to reduce the tax burden. The measures will take effect in 2027.
The reduction in IRS up to the 6th tax bracket will increase the net income of taxpayers in the last two months of the year.
Economist Filipe Grilo explains the impact that the reduction in IRS announced this Tuesday by the Prime Minister will have.
Prime Minister Luís Montenegro has announced a new reduction in IRS income tax up to the sixth bracket, a measure that Paula Franco, head of the Order of Certified Accountants (OCC), considers “positive,” but which will require the Portuguese to do the math once again. Similar to previous years, the extra money in their pockets will have an impact on the final settlement with...
Filipe Santos Costa, a commentator for CNN Portugal, explains how the Prime Minister managed to “change the subject of the day, which shifted from the motion of no confidence to the pension bonus and the reduction of income tax,” taking the opportunity to “reverse the cycle of enormous unpopularity in which the Government finds itself.”
The reduction in IRS income tax announced by Luís Montenegro will take effect with the payment of November's salary. The withholding tax table to be applied that month will reflect the reduction applied to the entire year.
The Minister of Finance assures that public accounts will end 2026 with at least a zero balance, despite the 800 million euro impact of two measures announced by the Prime Minister during the motion of no confidence debate: an IRS tax reduction and an extraordinary supplement for pensioners. Joaquim Miranda Sarmento stated in an interview with SIC Notícias that the government will maintain balanced accounts and a declining public debt, noting that the fiscal space for these measures stems from budget execution performance through August. The IRS reduction, impacting the first six tax brackets, will be reflected in November's withholding tax, while the 400 million euro pensioner supplement will be paid in December. Miranda Sarmento ruled out further fuel tax cuts, prioritising income support over fuel subsidies.
The PS abstained, Chega shouted “resignation” and the Government united to block the largest opposition parties. Montenegro used the debate to announce a reduction in IRS income tax and a bonus for pensioners.
Montenegro announces an IRS cut and pension bonuses. A week ago, the Ministry responded to Parliament that the tax reduction would not be implemented this year due to 'budgetary responsibility'.
The Government will propose a new reduction in IRS tax rates up to the sixth bracket, with retroactive effects to January 2026. The measure will be reflected in November's withholding tax and the Christmas bonus. Luís Montenegro also announced an extraordinary supplement for pensioners, to be paid in December. The measures are expected to be finalised at the next Council of Ministers meeting.
Luís Montenegro accuses Chega of living off “elections, motions, and resignations” and defends the Government's actions. The PM also announces a supplement for pensioners and an income tax reduction to support the middle class.
The Minister of Finance guaranteed that the commitment is to continue lowering the tax.
The government's measures for the housing market have been enacted by the President of the Republic and will come into force. They will reduce taxes.
Minimum unit tax rates for the ISP on unleaded petrol fall to 199.89 euros per 1,000 litres, and those for diesel drop to 156.66 euros.
