OE2022: More family allowance and less corporate income tax

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Nuno Fox / Lusa

Finance Minister João Leão

The Government has already presented to the parties the first draft of the State Budget for 2022 (OE2022), showing the two main pillars of the document, with incentives for public and private investment and support for family income.

One of the priorities of OE2022 is the incentive to public and private investment through the unused funds of Portugal 2020 and the Recovery and Resilience Plan (PRR). This is one of the data that remains after the presentation of the general lines of OE2022 to the parties by the Government, as reported by Jornal de Notícias (JN).

The publication found that the Government proposes tax incentives for companies to invest in 2022, namely with the payment of less IRC.

On the other hand, the OE2022 must have “specific support for young people”, namely through the program IRS Young, with the payment of this tax to be reduced, for three years, in “minus 30%, then 20% and, finally, 10% less”, according to JN.

At the level of families, households with children should also benefit from the “increase in specific deduction for each and more family allowance, according to the same diary.

In addition to the already announced relief in the IRS of the middle class, with the splitting of the levels, the Government will still be to study the increase of the lowest pensions.

These data show the intense “dating” that the Government is obliged to do with PCP and Left Block, which are essential for the approval of OE2022.

But the economy is also helping the Government, as the positive numbers in the projections point to the economic recovery and therefore give more leeway to OE2022.

Portugal to return to “pre-pandemic wealth levels”

The Secretary of State for Tax Administration, António Mendes, has already said that forecasts indicate that “Portugal will have the capacity to return to pre-pandemic levels of wealth”.

Foreseeing this scenario, the Government will have the possibility of “making choices about the size and incidence of the increase in family income”, says António Mendes, leaving the door open for OE2022 to meet some of the CFP and Left Block requirements.

However, the ruler alert that the country “cannot take a step bigger than the leg”.

But António Mendes underlines that, in OE2022, “there will be a lot of attention to the income policy, whether from the point of view of fiscal policy, whether from the point of view performance“.

“We have a big priority in the middle class, particularly in younger families with children. We also have a priority in investment recovery, whether public or private, based, certainly, on the PRR, but also on the fiscal side. An investment that allows the country to take advantage of this financial envelope to overcome its structural problems”, considers the Secretary of State.

Thus, the Government “is quite optimistic with the presentation of its proposal for SO2022, because it’s good for the country and, therefore, it will certainly be a proposal in which the majority of the Portuguese will have no difficulty in identifying themselves”, concludes António Mendes.