More and more voices are coming from the Government of Pedro Sánchez. rental contract Similar to the one reached in Portugal at the beginning of October. One of the last organisms to position itself, Economic and Social Councilfor example just a few days ago with António Costa Manager social mediatorsaims to increase the average salary in the neighboring country with tax cuts for companies and workers. Former President Mariano Rajoy criticized Pedro Sánchez’s attempt to “divide people into rich and poor”, while praising the Portuguese agreement himself. Portuguese is a contract signed with the main employer confederations. labor union UGT, but which denial between General Confederation of Portuguese Workers (CGTP), the other major union in the country.
One of the main goals of the Portuguese Government is to increase the weight of wages on the Gross Domestic Product, which represented 45.3% in 2019. The target set in the agreement for 2026 is up to 48.3%, three points higher than that year. to increase an expected 20% of the country’s average wage – amounted to 1,059 euros in June of this year – in the next four years. The first step to achieve this goal will be to improve quality. Average salary increased by 5.1% in 2023 and increase minimum wagefrom current 705 euros (66.6% of average salary) next year 760 euros, Until it reaches 900 euros in 2026. While some, such as Mercadona or Lidl, will increase their salaries by up to 11% next year, none of the major Portuguese companies have announced any revenue deal-related increases at this time.
tax incentives
To encourage companies to improve wages, the Government tax exemption in corporate tax (IRC) for anyone who agrees to a pay increase equal to or greater than the 5.1% set for 2023 and the targets set for subsequent years. These companies further reduce the margin This separates the 10% of the highest-paid employees from the lowest-paid 10% to qualify for these benefits. Tax incentives will also be given to companies that invest in research and development.
In terms of workers, the agreement includes: lower income tax (IRS) with an increase in the limits of each tax bracket to avoid wage increases mean a greater tax burden. Thus, each tranche of income tax next year will increase by 5.1%, which is equivalent to the expected increase in the wages of all workers. They will continue to pay the same taxes. Regardless of this salary increase. will also increase Between 50% and 100% fee for extraordinary watches It worked after 100 hours.
Rejection of the opposition
While the Portuguese government has emphasized its willingness to reach agreement despite the absolute majority achieved in January, the reality is that income agreement with the social institutions has been achieved. failed to persuade the opposition. Former associates of the Socialists in the previous legislature, left block (BE) and Portuguese Communist Party (PCP) rejected the deal, arguing that it worked for the bosses. The two sides argue that the appreciation of wages is not in keeping with the inflation rise, which will reach 7.8 percent this year according to the latest estimates, and that the agreement means impoverishing the workers. The union used the same argument. CGTPlinked with the communists to reject the deal.
The reaction of the main opposition party, the Conservative Party, was more measured. Social Democratic Party (PSD), described it as inadequate and unpretentious. The Social Democrats’ proposal was to update the income tax brackets. 7.4%a figure closer to the inflation forecast for this year, and 15% flat tax for workers under 35, except those with an income of more than 75,000 Euros per year. Social Democrats also criticized that the deal was closed at the last minute and in a hurry, something social agents also regretted after signing.
The agreement provides for permanent monitoring and subject to possible reorganizationsdepending on the development, Economical situation within the next four years. But for now, it doesn’t convince the majority of Portuguese. According to a survey published by Newspaper at the beginning of November, two out of three citizens think insufficient Expected minimum wage and average wage increases in both the public and private sectors by 2026.