Parliament debated this Friday the Government’s proposal that includes three of the measures to mitigate the impact of the price increase, namely, the one that establishes for 2023 an update of pensions different from the one resulting from the current law.
The Government’s proposal thus determines that, next year, pensions will be increased by 4.43% when its value is equal to or less than two Social Support Indices (IAS), in 4.07% when between two and six IAS is indicated and in 3.53% between six and 12 IAS.
Measures that have been announced to support families
Of the package of measures approved last week, this is one of the ones that has generated the most criticism from the opposition, which has accused the Government of cheating and applying a “cut” in pensions because it is reducing the base on which the 2024 increase will be made, compared to what would happen if the pension update law were applied in 2023, as required by current law.
The Government has mentioned that this solution, added to the forecast of an amount equivalent to half pension, paid in October, will make all pensioners see their income increase in 2023 and the same will happen in 2024.
PSD criticizes the Government for “passivity” in measures to combat inflation
In defense of the order of magnitude of the pension update contained in this proposal, the Government has also indicated that it is going through a situation of abnormally high inflation and that it is necessary to ensure the sustainability of Social Security.
The package being discussed this Friday also includes the “brake” on income that in 2023 will have a increase limited to 2%with the measure covering all tenants with contracts concluded until December 2022 -according to the document “Questions and Answers” published by the Government-.
Home rentals rise 2.8% in August year-on-year
As a counterpart to this limitation on the increase in rents, lessors will receive compensation in terms of IRS or IRC, as provided in the proposal, with part of the rental income being excluded from taxation.
The solution designed by the Government thus provides that, in the case of the IRS, for those who opt for category F (not including income) applied a coefficient of 0.91 to income (after deductions such as IMI or condominium expenses), this coefficient is expected to decrease as the tax rate also decreases (which happens for those with longer contracts).
In the case of the IRC, “the determination of the tax base of the rentals, to which the rates are applied (in the code of this tax) is obtained by applying the coefficient of 0.87says the diploma.
The Government’s proposal clarifies that this compensation to lessors “applies only to rents that, cumulatively, expire and are paid in 2023 and arise from lease contracts in force before January 1, 2022, communicated to the Tax and Customs Authority”.
Another of the measures in the package aimed at mitigating the impact of rising prices on household income and which forms part of this proposal is the reduction of VAT on electricity from the current 13% to 6% for consumption of up to 100 kWh per month (150 kWh in the case of large families) for periods of 30 days and power meters less than 6.9 kVA.
The VAT reduction on electricity “is not significant”, says DECO
The electricity measure takes effect from October 1, 2022 and lasts until December 31, 2023.
Source: Observadora
