In 2024 and 2025, the government is set to dish out approximately €2 billion in tax incentives, with initiatives ranging from the Internal Revenue Service (IRS) to the International Rescue Committee (IRC).
Tax Breakdown: Luís Montenegro's Government's Big Relief Plans
Whenever we talk about initiatives directly from Luís Montenegro's government, we're looking at a whopping €2 billion in tax relief by 2024 and 2025. Here's the juicy details!
Breaking it Down
Corporate Tax CutLuís spilled the beans on a sweet corporate income tax rate reduction from 21% to 15% back in July 2024. This move is set to cost the public treasury around €500 million each year[1].
Taxing Less, Earning MoreThe government is on a mission to ease the burden of income tax (IRS) on income from work. In June 2025, the PM declared a personal income tax reduction as "an act of justice" and a nod to workers' dedication and performance[2].
The Meat of MattersBy 2029, the government wants to reduce the IRS up to the 8th tax bracket by €2 billion, with a massive €500 million reduction lined up for 2025 alone. The cuts will prioritize low and middle-income earners, exactly where the help is needed[2].
The Big MovesThe tax reduction proposals were expected to hit the parliamentary table as early as mid-June 2025, with IRS cuts starting possibly as late as September 2025[2][4].
The Full Picture
This tax relief is part of a broader government agenda that includes state reform, labor legislation changes, beefed-up defense investments, and attempts to tackle bureaucracy and boost economic growth. The government also promises income policies that appreciate work and aim to boost worker income through fiscal measures[3][5].
The Bottom Line- Expect corporate tax to dip from 21% to 15% (costing €500 million annually starting 2024)[1]- Aiming for €2 billion cumulative IRS reduction by 2029, with a €500 million reduction in 2025, focusing on low to middle incomes[2]- IRS reduction proposals expected in parliament mid-2025, with implementation possibly starting in 2025[2][4]
Luís Montenegro's government's €2 billion tax relief is a jaw-dropping move to stimulate economic activity and provide financial relief to workers and businesses via lowered taxation.
The €2 billion tax relief announced by Luís Montenegro's government aims to stimulate economic activity by reducing corporate income tax rates from 21% to 15%, which could lead to significant savings for businesses (finance). Additionally, the government plans to ease the burden on personal income tax (personal-finance) by targeting low and middle-income earners with a cumulative reduction of €2 billion by 2029, with a substantial €500 million reduction in 2025.
%20to%20the%20International%20Rescue%20Committee%20(IRC).){kind=link}