Prime Minister Montenegro knew since July that the government was in a position to reduce income tax and grant bonuses to pensioners, despite reservations raised by Miranda Sarmento. This decision was prepared as a political ace to preempt opposition.
The executive is particularly concerned about a possible alliance between Ventura and Carneiro regarding VAT. This alliance could represent a significant threat to the government's fiscal strategy.
Sarmento reportedly expressed reservations about the timing and scope of these tax measures, highlighting concerns about their fiscal sustainability. However, Montenegro moved to implement the tax reductions before the opposition could articulate a coordinated response.
The so-called "tax war" reflects the government's intention to use tax cuts as a political weapon, preparing for what it anticipates will be a period of intense political dispute.
