Portugal’s New Minority Government Orders Tax Cuts
Portugal’s new centre-right Prime Minister Luis Montenegro announced income and corporate tax cuts in his first speech to parliament. Montenegro’s Democratic Alliance party, which has no majority, refused to make an accord with the far-right Chega party. Income tax will be cut by 1.5 billion euros, with middle-income earners benefiting most. Company taxes will be reduced from 21 percent to 15 percent over three years. The government’s programme will only pass in parliament with the abstention of the Socialists, who have 78 seats compared to the Democratic Alliance’s 80. Chega made significant gains in the March elections, and the Socialists have said they will oppose many government measures. Socialist leader Pedro Nuno Santos has warned that it will be “practically impossible” for his party to support the government’s 2025 budget.