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Portugal will eliminate VAT on a basket of basic products and raise the salary of civil servants

2023-03-24T18:11:41.196Z


The Government approves new measures to help families in the face of inflation On the same day that the Portuguese National Institute of Statistics confirmed that the public deficit stood at 0.4% of GDP in 2022, far from the 1.9% initially forecast, the Government announced a series of measures to help the population to mitigate the effects of runaway inflation for a year (this February it stood at 8.2%). The relationship between the control of public accounts and social spe


On the same day that the Portuguese National Institute of Statistics confirmed that the public deficit stood at 0.4% of GDP in 2022, far from the 1.9% initially forecast, the Government announced a series of measures to help the population to mitigate the effects of runaway inflation for a year (this February it stood at 8.2%).

The relationship between the control of public accounts and social spending always maintains a balance that the prime minister, the socialist António Costa, has made the pillar of his budgetary policy and that the opposition usually reproaches him from the left.

"Enervate whoever enervates, whatever the cost, we are going to maintain this trajectory," the prime minister warned on Wednesday in a parliamentary debate.

The main novelty announced this Friday in Lisbon is the abolition of VAT on a series of essential products, which was a measure adopted in Spain since January 1 and which did not initially convince the Portuguese Prime Minister, considering that this tax reduction had not been transferred to prices.

For this reason, the Government is negotiating the application with the food production and distribution associations to achieve a real price drop when VAT becomes zero.

The measure will take shape next week and will be in force for six months, Finance Minister Fernando Medina announced today.

In recent weeks, the Government has redoubled its campaign to control the rise in food prices, with inspections in supermarkets throughout the country, which have led to the opening of almost a hundred procedures for speculative increases.

According to the Food and Economic Security Authority, profit margins of more than 40% on eggs, oranges, carrots and onions have been detected in some establishments.

Another of the measures announced today is aimed at public employees, who in recent times have been leading mobilizations due to their loss of purchasing power.

Starting in April, they will see their salaries improve with a 1% rise to compensate for the deviation in inflation from the Government's forecasts.

In addition, the subsidy for food received by this group is increased to six euros.

The improvements will affect some 740,000 civil service workers.

The third measure is aimed at vulnerable families, who will receive a monthly support of 30 euros to which another 15 will be added for each child.

The beneficiary universe will no longer be limited to recipients of social benefits and will extend to low-income households.

The Government calculates that it will support around three million people, around 30% of the Portuguese population.

This measure is adopted after the president of the European Central Bank, Christine Lagarde, recommended last week to governments that they "quickly" reduce support for families to avoid "inflationary pressures in the medium term."

The Portuguese Finance Minister, Fernando Medina, distanced himself from Lagarde's vision: "It is not these families that are creating inflation,

The cost of the set of measures of the Portuguese Government is 2,500 million euros, which includes those for the More Housing program (900 million) announced in mid-February to try to mitigate the real estate crisis that penalizes young people above all and middle classes.

The opposition, to the right and left, criticized the measures presented this Friday as soon as they were known.

The parliamentary leader of the Social Democratic Party (PSD, center-right), Joaquim Miranda Sarmento, considered that the proposals are late and "ignore" the middle class, while the parliamentary leader of the Portuguese Communist Party, Paula Santos, criticized that they did not " fight the speculation with which many economic groups have benefits”.

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Source: elparis

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