In an interview with Lusa, André Ventura addressed the plan to create a single personal income tax – which is included in the Chega programme – proposing a 15% rate, despite admitting "other hypotheses" and "solutions", such as a rate of 10%.
According to the leader of Chega, the idea should be implemented in two legislatures, with a transitional period that "possibly begins with three levels, then to two, then to one".
Asked about the impact that a measure of this nature could have in terms of social justice - according to the IRS retention tables for 2022, a person with a salary of 900 euros and two dependents currently pays 31.5 euros of personal income tax, while a person in the same situation with a salary of 5,000 euros, pays 1,565 euros; with a rate of 15%, they would pay 135 euros and 750 euros respectively – the leader of Chega replied that, “in tax reform, there are always levels of lanes that eventually pay, or can pay, a little more, but it's not very significant in most cases”.
Recognizing, however, that for people whose incomes are between 800 and 1100 euros a month, there could be "some increase", Ventura considered that this "has to be compensated with the increase in deductions" in health and education.
According to André Ventura, the main beneficiaries of this measure would be the middle class, which would have a "fair rate", predicting that the cost of this tax reduction would be 1% of GDP, which could decrease to 0.5% of GDP due to the gain “in efficiency and less tax fraud”.
A flat rate is regressive; it is hardest on those with the lowest income. My wife and I are considering a move from US, and completely support the current tax scheme in Portugal, as it taxes those with the highest income at the highest rate.
By Joe Litton from USA on 11 Jan 2022, 19:09
Wages less than 25k per year should be exempt from income tax. More than that a flat tax is the fairest. Less than 40k per year should get a 1/2 VAT discount, while higher than that pays full VAT. Put the money back into the peoples hands rather than into wasteful government coffers.
By Nick from Lisbon on 12 Jan 2022, 07:36