&NewLine;<p>If Portugal's 2021 budget is passed as it stands, next year could bring further social support, wage and pension increases, and relief from the IRS. All these measures, which are set out in the Portuguese government's preliminary version of the 2021 budget proposal, are a clear signal that they want to get back on the path to pre-covid growth, and are prepared to put in the resources to do so; </p>&NewLine;&NewLine;&NewLine;&NewLine;<h2 class="wp-block-heading">Budget 2021 in Portugal&comma; what the government plans</h2>&NewLine;&NewLine;&NewLine;&NewLine;<p>The Portuguese government expects the country's economy to collapse by around 8&comma;5&percnt; &comma; a more pessimistic figure than the 6&comma;9&percnt; decline predicted by the former Finance Minister in the 2020 &period budget; </p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Here are the main measures planned in the draft 2021 budget in Portugal for next&rsquo&semi;year&colon;</p>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Employment and Social Supports </h3>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>Extraordinary increase of 10 euros for the lowest pensions, paid from August onwards; <strong>which will cost the state 99 million&semi;euros;</strong></li><li>Increase in the minimum social income, currently 438&period;81 euros, to 505&comma;10 euros&period; <strong>This measure is estimated to cost 75 million&semi; euros&period;</strong></li><li>Creation of extraordinary income support for workers in response to the pandemic crisis&comma; covering employees&comma; domestic services and the self-employed&comma; with a minimum value of 50 euros&period; <strong>A measure that will cost around 450 million&semi;euros&period;</strong></li><li>Support is maintained for informal workers for up to six months&period;</li><li>The allocation of income from the IMI and part of the IRC will be redirected to the social security budget&period;<br></li></ul>&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Health </h3>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>Allocation of an extraordinary risk premium of up to 219 euros to healthcare professionals working in areas dedicated to covid -19&period; A measure estimated at 60 million euros&period;</li><li>Recruitment of 261 professionals for INEM and 4,200 for the National Health Service &lpar; SNS &rpar;&period;</li><li>The <a href="https://www.noticiasaominuto.com/economia/1603304/iva-reduzido-nas-mascaras-e-gel-desinfetante-mantem-se-e-custa-23-milhoes">respiratory protection masks and disinfectant gel</a> will remain subject to the reduced VAT rate &period; <strong>The measure is estimated to cost 23 million&semi;euros&period;</strong></li><li>Increased investment in the primary healthcare units of the National Health Service &lpar; SNS &rpar; to the tune of 90 million&rsquo&semi;euros&period;</li><li>Exemption from payment of primary care user fees &comma; <strong>a measure that will have a financial impact of 47&comma;3 million&semi;euros&period;</strong></li><li>A budget of almost 26 million euros will be made available for the construction of the new Central do Alentejo hospital in Évora, and 5 million euros to launch the tender for the construction of the Seixal hospital in Setúbal;</li><li>Companies will be able to deduct donations to EPE &period hospital entities from their profits;<br></li></ul>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Education</h3>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>Hired over 3,000 employees in the <a href="https://vivreauportugalconsulting.com/le-systeme-scolaire-portugais/" class="rank-math-link">schools next year</a>&period;</li><li>Increase in the number of free places in crèches &comma; including children from families up to the 2nd income bracket&comma; benefiting&rsquo&semi;around 65,000 children&period; <strong>A measure estimated to cost 11 million&semi;euros&period;</strong></li><li>Primary and secondary education and administration, with a school budget of 7 billion euros, an increase of 7 billion euros over 2020;</li><li>Scientific and higher education establishments will be exempt from paying VAT on activities linked to reducing the spread of Covid-19 &period;<br></li></ul>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Housing </h3>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>The Institut de l&rsquo&semi;Habitat et de la Réhabilitation Urbaine &lpar; IHRU &rpar; will receive 10 million&rsquo&semi;euros for the recovery of State assets for housing purposes and 317&comma;6 million&semi;euros for housing promotion policies&period;<br></li></ul>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Taxes</h3>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>VAT paid by consumers on accommodation, cultural and catering expenses incurred during a quarter can be discounted on consumption in the same sectors during the following quarter&period; <strong>The measure is estimated to cost 200 million&semi;euros&period;</strong></li><li>VAT paid on sporting activities will be partially deducted in the IRS, in the same way as the deduction currently granted to expenditure at restaurants, hairdressers and veterinary surgeons;</li><li><strong>IRS withholding tables will be reduced in 2021 by an amount equivalent to 200 million euros per period;</strong></li><li>The permanent reduction in the VAT rate on electricity will save families 150 million euros next year&period;<br></li></ul>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Company</h3>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>Offshore entities are excluded from public aid created as part of exceptional and temporary pandemic measures &period;</li><li>Large companies with profits in 2020&comma; using support granted during the pandemic or benefiting from certain tax advantages cannot lay off workers and will have to maintain in 2021 the level of&&num;8217&semi;employment registered over October 2020&period;</li><li>The government has set aside 500 million euros in guarantees for TAP &comma; so that the company can eventually obtain financing on the market&comma; in addition to the 1,200 million euros already approved in loans&period;<br></li></ul>&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;<div style="height:20px" aria-hidden="true" class="wp-block-spacer"></div>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Transport </h3>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>Funding of around €260 million for the public transport fare reduction program &lpar;PART&rpar;&period;</li><li>The Environmental Fund plans to allocate more than 36 million euros to the Metropolitano de Lisboa&comma; to finance the extension of the network and purchase new trains&period;</li><li>384 million euros invested in rail infrastructure &colon; 147 million&semi;euros for Corredor Internacional Sul&comma; 99 million&semi;euros for Corredor Internacional Norte&comma; 78 million&semi;euros for Corredor Norte-Sul and 60 million&semi;euros for Corredores Complementares&period;<br></li></ul>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Culture</h3>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>Implementation of the "Lotaria do Património"&comma; in the form of "scratch cards"&comma; and introduction of an "extraordinary cultural patronage"&comma; scheme with tax benefits&period;</li><li><strong>Creation of a statute for cultural professionals&period;</strong><br></li></ul>&NewLine;&NewLine;&NewLine;&NewLine;<hr class="wp-block-separator"/>&NewLine;&NewLine;&NewLine;&NewLine;<p>Portugal's 2021 budget&comma; is very courageous on the part of the Portuguese government&comma; it clearly wants to put the country back on the path to growth&comma; let's hope&comma; now that it will be well received after a few corrections voted by a majority in the assembly and accepted by Europe&period; </p>&NewLine;
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