Portugal presents its 2020 budget project
Portugal presents its 2020 budget project, it set Tuesday to reach a budget surplus for the first time in 45 years of democracy, these thanks to a solid economic growth. Let's remember that this growth is achieved thanks to the tourist sector and therefore remains fragile.
In return, the government has committed to reducing small business tax.
2020 Budget Proposal
In his project of the 2020 budget, the socialist government projects a surplus representing 0.2% of gross domestic product (GDP), compared with a deficit of 0.1% expected at the end of 2019.
This will give further impetus to reducing the country's debt, one of the highest in the Eurozone. Portugal's debt-to-GDP ratio is expected to fall to 116.2% in 2020, from 118.9% this year, according to the budget forecast.
The minority government of Antonio Costa, which won a second term in office last October, is hoping to achieve economic growth of 1.9% next year, identical to 2019.
The government plans to ease the tax burden on the middle classes by introducing new intermediate tax brackets and additional subsidies for large families.
Small businesses are the big winners
SMEs with annual taxable profits of less than 25,000 euros will see their tax at drop to 17% against 21% currently.
In return, taxes on tobacco, lotteries and high-sugar drinks will increase.
The government plans to increase average civil service pay by 0.3%, and 800 million euros will be injected to reduce health sector debt.
The Parliament will vote on the first reading of the draft budget on January 10. It remains to be seen whether the draft budget for 2020 will be validated.
