Portugal announces higher taxes as strike is called
3 October 2012
Portugal has announced several new austerity measures, which were met with a call for a huge strike next month.
These include reducing Portugal’s income tax brackets from eight to five. This replaces a social security tax rise that was shelved due to its deep unpopularity.
Portugal’s largest trade union, the CGTP, called the strike for mid-November to oppose the latest moves.
Portugal must get its deficit below the European Union’s target of 3% of GDP.
On Wednesday, Finance Minister Vitor Gaspar also unveiled a 4% “extraordinary” tax.
With the tax bracket changes, the average tax rise should increase from 9.8% in 2012 to 13.2% in 2013.
“The adjustment is harder than we anticipated,” Mr Gaspar said, as he also raised the unemployment forecast for 2013 to 16.4% – up slightly from 16%.