The Portuguese government wants to increase the minimum wage by 25%
The new government of Antonio Costa, has as its main objective to increase the minimum wage by 25% over 4 years.
On Saturday night, the executive published its commitments on the government website. The Portuguese government has pledged to raise the minimum wage each year by a cumulative amount of 25% by 2023. Currently, the minimum wage in Portugal is 750 euros gross per month over 12 months, or even 14 months for some companies.
The minimum wage in Portugal has already been revalued in 2016
When he took office in 2016, Antonio Costa had already re-evaluated the minimum wage in Portugal. In agreement with the main employers' and employees' unions, the minimum wage was raised from €485 to €530.
Objective: increase tax revenues
This increase in the SMIC is not without ulterior motives. Indeed, this increase would enable Costa's government to raise 500 million euros in annual tax revenue, which would bring contributions to 1.2 billion euros a year, enough to help pay down the public debt.
Revaluation will have an impact on the Portuguese business economy
Don't dream, even if this initiative is commendable and will delight minimum wage earners. But it will also have an impact on companies. The economic and industrial fabric is still fragile and far from stabilized. Contrary to what the government or even the foreign press may announce. If Portugal has emerged from the crisis, it is above all thanks to the tax benefits that Portugal offers to foreign retirees and working people, and also thanks to tourism and real estate investment. Portugal's industrial fabric remains very fragile.
This revaluation would represent an increase in social security and employer contributions of around 185.63 euros.
