# Madeira regional tax policy developments > Developing situation record from CLSTR: https://clstr.news/situations/madeira-regional-tax-policy-developments > Updated: 2026-10-27T16:12:17.000Z. Sources: 10. Developments: 2. In Machico, the PSD opposition challenged the Socialist-led municipal council over proposed Personal Income Tax (IRS) refunds. While the local executive proposed returning 1% of the variable IRS participation to families, the PSD advocated for a 5% return to alleviate economic pressure on households, criticizing the council for prioritizing other expenditures. At the regional level, the Legislative Assembly of Madeira unanimously approved a proposal to adjust IRS rates. This measure maintains a tax reduction of up to 30% across all brackets relative to mainland Portugal, preserving a fiscal differential for taxpayers in Madeira and Porto Santo. The regional government anticipates this adjustment will reduce revenue by approximately 5.6 million euros by 2026, with changes expected to appear in salaries starting in November. Further legislative efforts in the Madeiran Parliament include a rejected initiative by the Chega party concerning tax exemptions for overtime and bonuses, which was dismissed due to a lack of legal and regulatory clarity. ## Timeline ### 2026-10-27: Portugal fiscal landscape: IRS exemptions and economic challenges Portugal faces complex fiscal and social issues, including high IRS exemption rates, regional tax reductions in Madeira, and significant child poverty and housing instability. 10 sources. https://clstr.news/cluster/madeira-legislative-assembly-approves-irs-tax-reductions ### 2026-09-28: Machico PSD opposes 1% IRS refund proposal PSD members in Machico are calling for the municipality to return 5% of the variable IRS to families in 2027, criticizing the Socialist majority's decision to return only 1%. 4 sources. https://clstr.news/cluster/machico-psd-opposes-1-irs-refund-proposal --- Cite as: Madeira regional tax policy developments. CLSTR, https://clstr.news/situations/madeira-regional-tax-policy-developments