AR debate today relief of the cost of living. What do the parties propose?

The Aquida has scheduled a protestative debate and, in addition to its bills for the reduction of fuel VAT and the exemption of this tax for the food basket, will also be discussed four bills presented by Livre, PCP and BE, and seven resolutions (recommendations to the government, without force of law), the PS, IL, Livre, BE, JPP and PAN, in addition to two projects for the elimination of tolls on the bridges 25 April and Vasco da Gama.

The initiatives of Aquira should be rejected by the PS and by PSD and CDS-PP, parties that support the government. Andre Ventura's party refused to advance Lusa as it will vote the PS resolution draft.

The Minister for Finance warned that the adoption of these measures could lead the country to a budgetary deficit.

These are the key points on party measures to mitigate the increase in cost of living:

Arrives proposes VAT to 13% in fuels and total exemption in the food basket

The party of André Ventura, who scheduled the debate, presents two bills with the aim of reducing the VAT rate of fuels to 13% and exempting from this tax a set of essential food goods.

Cávez argues that VAT is “one of the main components of the final price” of fuels and that its decline to the intermediate rate “constitutes an immediate relief measure, with a direct impact on the final price paid by consumers”, also arguing that such a fall should “continue as long as the instability of Iran’s war, in particular the Strait of Ormuz, continues”.

The party also wants to recover the VAT measure Zero in a basket of essential foods, adopted by the Government of António Costa during the Covid-19 pandemic, because it considers that “it is a necessary, proportionate and urgent measure, in line with European best practices and with the constitutional principle of guaranteeing decent living conditions for all citizens”.

Both measures, to be adopted, would enter into force with the next state budget, i.e. in January of next year. The PS has already announced that it will vote against these initiatives, with the socialist Secretary-General, José Luís Carneiro, declaring the opposition of the party to measures that have been implemented only in early 2027.

In discussion, there will also be a party recommendation to the Government to abolish tolls on the Bridges 25 April and Vasco da Gama, between Lisbon and the south bank of the river Tagus.

PS insists for the third time on measures to mitigate increased cost of living

After, in April and July, having seen similar draft resolutions failing with recommendations to the government to respond to the increase in cost of living, the PS now insists on a set of measures, criticizing the government for the insufficient support.

Among the 15 proposals, without force of law, highlight the temporary reduction of VAT on fuels from 23% to 13%, a measure with “quarterly horizon” and subject to monthly assessment, and the temporary exemption of VAT on a food basket, initially for three months.

The party of José Luís Carneiro again proposes a measure on pensions, which is already the recovery of a proposal that the PS led to the last State Budget and that was also rejected.

“ It converts into extraordinary pension update, to be financed by the State Budget, any extraordinary supplement that will be attributed to pensioners, depending on the evolution of the structural margin of the system and, if necessary, compensating with the adjustment at a percentage point of the IRC rates for additional financing of the State Budget to the Financial Stabilisation Fund for Social Security”, suggests.

The PS also calls for a systematic assessment of “evolution of costs, margins and remuneration along the food value chain”.

Liberals pressure Government to implement recommendation for descent of ISP approved in May

The IL brings to debate only one draft resolution (without force of law) in order to pressure the government to comply with another recommendation made by the liberals and approved by Parliament in May to respond to inflation and rising fuel prices.

This resolution, which the Liberals are now insisting on applying, called on the executive to proceed with 17 measures, including the reduction of the tax on petroleum and energy products (PIS) in an equivalent way to the reduction in the VAT on fuels from 23% to 13%, the application of reduced VAT on gas cans, the strengthening of the supply of public transport and the revision of the laws governing telework.

Among the measures proposed by the IL is the acceleration of renewable energy exploitation licensing, support for farmers, the transport of goods and passengers, fisheries and the creation of a mechanism to monitor the development of the sale price for essential food to the public.

Free proposes reduced rate of VAT on bottled gas

The Livre proposes, through a bill, the application of the reduced VAT rate – 6% – to bottled gas for 12 months, and, in a draft resolution, recommends the fixing of maximum margins for the marketing of simple fuels and the bottled GPL.

It also proposes that the regulatory authority submits a technical proposal to determine these margins and that the Government publish, within a maximum of 15 days, a ordinance setting the maximum margins for an initial renewable 60-day period.

PCP proposes end of “tax paying tax”

The PCP presented a bill aimed at eliminating the VAT incidence on the ISP, arguing that this is a charge that “is not acceptable” and stressing that “hurge to correct the fact that there is ‘tax paid tax’”.

Although it considers that the proposal helps to respond to high fuel prices, the Communist bench points out that the problem “is not only fiscal in nature” and that the “solution for the energy sector goes through both price regulation and public sector control, putting it at the service of the country’s development”.

The party also brings to debate a bill to eliminate tolls and public-private partnerships (PPP) on the 25th of April bridges and Vasco da Gama.

Block or VAT Zero in food and maximum price in fuels

Bloquists propose, through a bill, the temporary VAT exemption on a set of essential foods for a renewable period of three months, providing that the measure should enter into force at the same time as the State Budget for 2027, i.e. in January of next year.

The party also submitted a draft resolution asking the executive to set a maximum selling price for fuels to the public by means of a formula that reconciles the average wholesale price, the ISP, VAT and other charges, and a retail margin that prevents “supply gains”.

PAN joins the calls for VAT exemption in essential foods

The party of Inês de Sousa Real submits a draft resolution recommending to the Government that, in response to the rise in prices, approve the application of the VAT exemption in a set of food products considered essential.

“ The return of VAT application Zero in the essential food basket will serve to relieve families and help them cross this difficult economic context, and the government must defend and approve them as soon as possible,” the party argues.

JPP advocates descent of the ISP and attention to “additional costs of insularity”

The JPP brings to the discussion a resolution calling on the executive to reduce the tax burden on fuels by reducing the ISP, to create an “automatic price stabilization mechanism” and to ensure that any extraordinary revenue from VAT revenue “is fully and automatically returned to consumers through the corresponding reduction in fuel taxation”.

The party also calls for a link between the Government of Luís Montenegro and the Regional Governments of the Azores and Madeira in order to adapt the measures to the “additional costs arising from insularity and the specific possibilities for reducing taxation expressly permitted by European Union law”.