Luís Montenegro rejects proposal to reduce Portugal's VAT rate

Portuguese Prime Minister Luís Montenegro has rejected a proposal to reduce the standard VAT rate from 23% to 21% as part of the 2027 State Budget discussions. The proposal, advanced by the Livre party, aims to lower the tax burden on lower-income citizens.

Montenegro argued against the reduction, stating that because VAT applies to everyone, the primary beneficiaries would be higher-income families with greater purchasing power and consumption levels.

During the parliamentary debate, Montenegro also addressed discussions regarding extraordinary contributions from large energy companies, such as Galp, and defended his administration's fiscal record. Finance Minister Joaquim Miranda Sarmento emphasized that the government expects opposition parties not to propose amendments that increase expenditure or reduce revenue during the budget process.