Lisbon, Sept. 24, 2026 (Lusa) - The Portuguese Parliament is on Thursday debating 14 bills from various parties aimed at alleviating the rising cost of living, including proposals to reduce VAT on fuel and food, with the Government warning of the impact on public finances.

Chega has scheduled a protest debate and, in addition to its own bills to reduce VAT on fuel and exempt the basic food basket from this tax, four bills tabled by Livre, the PCP and BE will also be debated, along with seven motions for resolutions (recommendations to the Government, without the force of law) from the PS, IL, Livre, BE, JPP and PAN, as well as two bills calling for the abolition of tolls on the 25 de Abril and Vasco da Gama bridges.

Chega's initiatives are expected to be rejected by the PS, PSD and CDS-PP, the parties supporting the Government. André Ventura's party, however, has declined to tell Lusa how it will vote on the PS draft resolution.

The minister of finance warned that the approval of these measures could lead the country into a budget deficit.

Here are the key points regarding the parties' measures to mitigate the rising cost of living:

+++ Chega proposes a 13% VAT rate on fuel and a total exemption for the basic food basket +++

André Ventura's party, which called for the debate, is tabling two draft bills aimed at reducing the VAT rate on fuel to 13% and exempting a range of essential foodstuffs from this tax.

Chega argues that VAT is «one of the main components of the final price» of fuel and that lowering it to the intermediate rate «constitutes a measure of immediate relief, with a direct impact on the final price paid by consumers», whilst also maintaining that this reduction should «remain in place whilst the instability caused by the war in Iran, particularly in the Strait of Hormuz, persists».

The party also wants to reinstate the zero-VAT measure on a basket of essential foodstuffs, adopted by António Costa's government during the Covid-19 pandemic, as it considers that «it is a necessary, proportionate and urgent measure, in line with European best practice and with the constitutional principle of guaranteeing decent living conditions for all citizens».

Both measures, if approved, would come into force with the next state budget, i.e. in January next year. The PS has already announced that it will vote against these initiatives, with the leader of Socialists, José Luís Carneiro, stating the party's opposition to measures that would only take effect in early 2027.

Also under discussion is a recommendation from the party to the Government to abolish tolls on the 25 de Abril and Vasco da Gama bridges, between Lisbon and the south bank of the River Tagus.

+++ PS insists for the third time on measures to mitigate the rise in the cost of living +++

After seeing similar draft resolutions – containing recommendations to the Government on how to address the rising cost of living – rejected in April and July, the PS is now once again insisting on a set of measures, criticising the Government for providing insufficient support.

Among the 15 proposals, which have no legal force, particular attention is drawn to the temporary reduction in VAT on fuel from 23% to 13%, a measure with a «quarterly timeframe» and subject to monthly review – as well as the temporary exemption from VAT on a basket of food products, initially for three months.

José Luís Carneiro's party is once again proposing a measure on pensions, which is in fact a revival of a proposal the PS put forward in the last state budget and which was also rejected.

«Convert into an extraordinary pension adjustment, to be funded by the state budget, any extraordinary supplement that may be granted to pensioners, depending on the evolution of the system's structural margin and, if necessary, offsetting this with a one-percentage-point adjustment to corporation tax rates to provide additional funding from the state budget to the social security financial stabilisation fund», it suggests.

The PS also calls for a systematic assessment of «the evolution of costs, margins and remuneration throughout the food value chain».

+++ Liberals press the Government to implement the recommendation to reduce the ISP [the tax on petroleum and energy products], approved in May +++

The IL is bringing to the debate just one draft resolution (which has no force of law) with the aim of pressuring the Government to comply with another recommendation put forward by the Liberals and approved in May by Parliament to address inflation and rising fuel prices.

This resolution, which the Liberals are now insisting be implemented, called on the government to introduce 17 measures, including a reduction in ISP equivalent to the cut in VAT on fuel from 23% to 13%, the application of a reduced VAT rate to domestic cooking gas cylinders, the expansion of public transport services, and a review of the laws governing remote working.

Among the measures proposed by the IL are also the acceleration of licensing procedures for renewable energy projects, support for farmers, the freight and passenger transport sectors, the fisheries sector, and the creation of a mechanism to monitor changes in the retail price of essential foodstuffs.

+++ Livre proposes a reduced VAT rate for gas +++

Livre proposes, via a draft bill, the application of a reduced VAT rate – 6% – to domestic cooking gas cylinders for 12 months, and, in a draft resolution, recommends setting maximum mark-ups for the sale of simple fuels and bottled LPG.

It also proposes that the regulatory authority submit a technical proposal to determine these margins and that the Government publish, within a maximum of 15 days, an order setting the maximum margins for an initial period of 60 days, renewable.

+++ PCP proposes an end to ‘tax on tax' +++

The PCP has tabled a draft bill aimed at eliminating the application of VAT on the Special Tax on Petroleum Products (ISP), arguing that this is a levy that «is not acceptable» and emphasising that «it is urgent to rectify the situation of ‘tax on tax'».

Whilst acknowledging that the proposal helps to address high fuel prices, the Communist Party's parliamentary group points out that the problem «is not solely of a fiscal nature» and that the «solution for the energy sector lies both in price regulation and in public control of the sector, putting it at the service of the country's development».

The party is also tabling a bill to abolish tolls and public-private partnerships (PPPs) on the 25 de Abril and Vasco da Gama bridges.

+++ Bloco calls for zero VAT on food and a price cap on fuel +++

Through a draft bill, Bloco members are proposing a temporary VAT exemption on a range of essential foodstuffs for a renewable period of three months, stipulating that the measure should come into force at the same time as the 2027 state budget, i.e. in January next year.

The party has also tabled a draft resolution calling on the government to set a maximum retail price for fuel using a formula that balances the average wholesale price, the ISP, VAT and other taxes, alongside a retail margin that prevents «speculative gains».

+++ PAN joins calls for a VAT exemption on essential foodstuffs +++

Inês de Sousa Real's party has tabled a draft resolution recommending that the Government, in response to rising prices, approve the application of a VAT exemption on a range of food products considered essential.

«The reinstatement of zero VAT on the essential food basket will provide relief for families and help them navigate this difficult economic climate; the Government must therefore advocate for and approve this measure as soon as possible,» the party argues.

+++ JPP calls for a reduction in the ISP and attention to the «additional costs of insularity» +++

The JPP is tabling a resolution calling on the government to reduce the tax burden on fuels by lowering the ISP, to create an «automatic mechanism for fiscal price stabilisation» and to ensure that any extraordinary revenue from VAT «is fully and automatically returned to consumers through a corresponding reduction in fuel taxation».

The party also calls for Luís Montenegro's Government to coordinate with the regional governments of the Azores and Madeira in order to tailor the measures to the «additional costs arising from insularity and the specific possibilities for tax reduction expressly permitted under European Union law».

FM/AYLS // AYLS

Lusa