DECO PROteste warned Portuguese taxpayers that a reduction in source withholdings does not necessarily equal paying less income tax. Having more money available in your salary in recent months does not mean that workers will effectively pay less taxes, but rather that they deliver a smaller portion of their income to the State in advance.
The consumer defense organization recommends that taxpayers not confuse the reduction in source withholdings with an equivalent decrease in the tax owed. It is important not to confuse what you receive monthly with what you effectively owe the State.
DECO PROteste advises workers to set aside part of this additional income whenever possible, so they are prepared for the tax settlement that will be made in 2027, when they will at that time have to account to the tax authorities about the income actually earned.
The practical effect of reduced withholdings is only a postponement of paying part of the income tax, not a reduction of the tax itself. Taxpayers should be aware that, at the time of the annual income tax settlement, they may still have to pay or receive additional amounts, depending on their complete tax situation.
