In a recent address, Portuguese Prime Minister Luís Montenegro outlined a plan to address the rising cost of living, particularly due to escalating fuel prices. While some measures, like a pension bonus and personal income tax cuts, were previously announced, Montenegro confirmed these initiatives will officially proceed. The pension bonus will provide varying amounts based on income levels, aimed at supporting lower-income households.
Montenegro’s strategy includes maintaining a discount on fuel taxes, which is expected to increase slightly in the coming weeks. This decision is crucial as it aims to alleviate the financial burden on consumers, especially those reliant on transportation. Additionally, the government will allocate funds to support sectors most affected by fuel price hikes, such as transport and agriculture.
However, Montenegro firmly stated that he will not reduce VAT on food items, a move that has been suggested by opposition parties. He emphasized the importance of fiscal responsibility, referencing Portugal’s past economic challenges and the need to avoid short-term fixes that could lead to long-term consequences.
This approach highlights a divergence from strategies adopted by other European nations, where VAT cuts have been implemented to combat inflation. Montenegro’s stance may reflect a broader trend of prioritizing sustainable economic policies over immediate relief measures, which could shape public sentiment and political dynamics in the future.
Source: Euronews
