Portuguese Parliament debates cost of living relief measures

cost of living VAT reduction fuel prices Portuguese Parliament budget deficit

The Portuguese Parliament is debating several legislative proposals aimed at mitigating the rising cost of living. Key initiatives include the Chega party’s proposal to reduce VAT on fuel to 13% and implement a zero-rate VAT on essential food items. Other political groups, including the PCP, JPP, and BE, have also presented measures such as reducing VAT from 22% to 16% and eliminating tolls on major bridges.

Finance Minister Joaquim Miranda Sarmento has warned that these measures could jeopardize the country's fiscal stability. He estimated that reducing fuel VAT and exempting essential foods could cost approximately 2 billion euros annually, potentially pushing Portugal into a budget deficit by 2027.

Political tensions are high, with Chega leader André Ventura accusing the PS and PSD of maintaining a non-aggression pact to block tax reductions. Meanwhile, the PCP has organized protests against rising fuel costs, arguing for price regulation and public control of the energy sector to combat speculation.