The Portuguese Government estimated that the new tax reliefs, including the new IRC cut and housing tax measures, will have an additional impact on the 2027 State Budget of around 4.8 billion euros, even without adopting further measures. This estimate already incorporates the combined effect of these fiscal policies.
Despite the significant amount, the increase in budgetary impact is considered contained by the Government. The reason for this assessment is related to the fact that, when compared with GDP growth forecasts, the weight of public spending could still be reduced.
This analysis suggests that the Lisbon executive understands that the fiscal room created by economic growth allows for accommodating these tax cuts without compromising the balance of public accounts. The presented scenario indicates careful management between fiscal stimulus and budgetary sustainability.
