Lisbon. Clearinghouse increases IRS return to 3%
The Lisbon City Council will increase the return of IRS for citizens who are entitled to support, going from the current 2.5% to 3% in 2022. The proposal by the president, Carlos Moedas, was approved this Monday by the municipal executive.
The law that regulates the financing of municipalities is intended for Municipal Councils up to 5% of the Income Tax for Individuals (IRS) of those who have tax residency in the county, with each municipality being responsible for deciding which travel it retains.
According to the proposal now approved, and which will be submitted to the Municipal Assembly, the Chamber will have “a 2% share in the Personal Income Tax to be in force in 2022”.
Currently, this value is at 2.5%, so in 2022 there will be an increase in the “return of the personal income tax to the people of Lisbon”, as stated by Carlos Moedas (PSD) in a statement released on social networks.
Carlos Moedas justified the measure, which was one of his electoral promises, because Portugal is “one of the countries with the highest tax burden in Europe” and, on the other hand, because Lisbon “has to be competitive” in relation to other European cities. “a signal for that response” and “a signal of economic expectations” in the context of a post-pandemic recovery.
What votes had a proposal?
The proposal was approved with seven votes in favor of those elected from the PSD, CDS-PP and independents in the Novos Tempos coalition; with five abstentions from socialist councilors and with votes against the other executive elements (two from the PCP, one from the Left Block, one from Livre and one from the independent Paula Marques).
In a statement, the Socialist councilors explained that they had not voted against this “proposal to return 3 IRS points, instead of the current 2.5 points, the highest rate of return in the Metropolitan Area, even after Carlos Moedas rejected the proposal for alteration of the PS, which made it possible to return 3 IRS points, but also implemented the free day care centers in the municipality”.
“The Socialist Party continues to defend that free day care centers are socially fairer, because it does not concentrate the return of adjustments in the two highest levels of the IRS, it has a greater impact on families’ benefits, and is an important stimulus to increase the birth rate in a of the oldest cities in one of the oldest countries in Europe”, reads the statement.
PCP councilor Josué Caldeira told Lusa that the communists voted against this measure because it will translate into a loss of revenue for the municipality, which will fundamentally favor people with the most adequate, arguing that these funds can be used in social programs of the Chamber, such as the promotion of affordable housing or the Social Emergency Fund.
Josué Caldeira said that the Social Emergency Fund was the destination of 7.5 million euros from the chamber in recent years and that 42 million euros of lost revenue are at stake with the proposal to return the IRS earlier today, compared to 56% of this amount will be refunded only to 10% of the population of the city, the “richest in Lisbon”.
Also councilwoman Beatriz Gomes Dias, from BE, “voted against the proposals of the right and the PS that reduced IRS revenues from” considering that it was “a fiscally regressive measure and handing these resources over to the richest Lisboners”, a statement of the party.
BE brought to the meeting a proposal to change the spill, which was rejected by the “right and PS”, which guaranteed “the payment of spill over profits between 100 and 150 thousand euros to companies that do not comply with labor legislation, penalizing , in this way, as companies that use precarious work in their activity”.
Councilwoman Paula Marques, in a written note, said that the approved proposal on the IRS “saves taxes on the richest and dispenses even more with resources used for the city”.
“This proposal takes place without any counterpart of social balance with a strong impact on the lives of families, such as, for example, the expansion of the public network of day care centers and their gratuity, which was refused”, he added, considering that “thus worsens the asymmetry of conditions of those who live in Lisbon”.