Portuguese political parties clash over fuel and food VAT cuts

Portuguese political parties are engaged in a heated debate over measures to mitigate the rising cost of living. The Socialist Party (PS), led by José Luís Carneiro, is demanding immediate action, including a reduction in VAT on fuel and zero VAT on essential food items. Carneiro argued that the government is failing to anticipate crises and is effectively profiting from inflation.

Finance Minister Joaquim Miranda Sarmento has warned that implementing these tax cuts would lead Portugal into a budget deficit by 2027. He estimated the annual impact of these measures at approximately 2 billion euros, noting that the government lacks the budgetary surplus to cover such costs. He characterized broad tax reductions as ‘blind aid’ that would benefit those who do not need it, suggesting instead targeted support for vulnerable families and energy-intensive industries.

André Ventura, leader of the Chega party, accused the government of hypocrisy, noting that previous administrations had supported fuel tax cuts. Meanwhile, the PCP has criticized the government's handling of fuel prices, calling for price regulation and a crackdown on the profits of large economic groups.

In other political developments, the PS is preparing new proposals to address the housing crisis, following concerns over unaffordable rents. Additionally, there is ongoing discussion regarding the reform of local electoral laws and the revision of local finance laws to reduce territorial disparities.