Council of Ministers’ “18-hour budget marathon” condemned as waste of time

Council of Ministers’ “18-hour budget marathon” condemned as waste of time

Critics of the government wasted no time in condemning the weekend’s Council of Ministers which took 18 hours of tense debate to agree “minimal changes” to the tax regime.
The extraordinary length of time for a meeting of its kind shows that the coalition hangs by a thread, José Sócrates former Socialist prime minister considered during his weekly TV commentary for RTP on Sunday.
Bloco de Esquerda’s Catarina Martins was equally scathing, saying the time taken to discuss “tenths of taxes” was nothing more than a form of electoral propaganda.
The nitty-gritty coming out of Lisbon at three o’clock on Monday morning was bleak, and shows that the tax burden is here to stay, at least until 2016.
Público outlined the “compromise” that concedes the IRS “sobretaxa” (extra tax) should be eased, but makes any relief dependent on the state’s capacity to combat fraud and tax evasion, and any eventual growth in the economy.
“For taxpayers, nothing changes throughout 2015,” writes the paper. “They will simply be informed every three months how the government’s income from taxes is developing,” and any reduction of the sobretaxa will come only at the end of the year “at the moment of agreeing payments with the taxpayer, in the middle of 2016”.
This “contract of trust”, as it is being called, is now to go up for discussion with the Socialist Party, writes Correio da Manhã, and the budget itself is due to be presented in parliament on Wednesday.
As Sócrates commented on RTP: “The state budget is a law that takes a long time to be constructed and negotiated. It is something that should be done over a period of months, not in one meeting.”
For now, what is clear so far is that the government plans to reduce IRC for businesses by two percentage points; increase minimal pensions by 2.5 euros per month; scrap the controversial CES payment on pensions (except to those receiving very high monthly amounts) and return to public sector workers the 20% salary cuts that were deemed unconstitutional.
Other aspects are bound to come to light in the next few days, including the scrapping of IMI rates tax for as many as 50,000 financially-strapped families.
There is, for example, the proposal for a new tax on laboratories designed to rake in money on medication sold for distribution by the health service.
Commenting on the news coming out of this latest coalition meeting, Socialist MP Marcos Perestrello said his party “feared the worst”, suggesting that the “shambolic” performance reminiscent of “the worst moments” of the catastrophic and short-lived PSD government of Santana Lopes.