Lisbon, Oct. 9, 2025 (Lusa) - The Portuguese Communist Party (PCP) on Thursday expressed "total opposition" to the proposed State Budget for 2026, accusing the PS and Chega of being committed to it and saying it would exacerbate tax injustices, highlighting the reduction in corporate income tax.

"This is a budget that exacerbates tax injustices, not only with the reduction in corporate income tax [by another percentage point, to 19%], but also with the maintenance of tax benefits, which, according to one estimate, are in the order of €1.8 billion," declared the PCP"s parliamentary leader, Paula Santos, in the Parliament.

The PCP's parliamentary leader claimed that the proposed State Budget for 2026 also provides for "a reduction in the TSU (Single Social Tax) for employers and "weakens Social Security".

"This is a budget that the PCP totally opposes," said Paula Santos, who accused Chega of being in "convergence with these options" and the PS of having already made clear "its commitment to all these options" of the PSD/CDS-PP government.

The MP emphasised the openness to the viability of the Budget expressed by the Secretary General of the PS, José Luís Carneiro: "On the part of the PS, the reference he made that it will be easier to approve the Budget is indeed noteworthy".

Paula Santos said that the government led by Luís Montenegro was trying to present its proposal as "a technical document, to make it easier to approve, whether with Chega or the PS", but the Budget should be seen as "a political instrument".

The PCP's secretary general, Paulo Raimundo, announced at the end of September that his party would vote against the proposed State Budget for 2026 and would do everything to stop it.

Today, in a first reaction to the proposal's content, the PCP's parliamentary leader argued that the government "insists on policy options of low wages, low pensions, the destruction of public services, real estate speculation and favouring large economic interests", and "compromises public investment".

According to Paula Santos, the problems of sectors such as health, education and housing are being forgotten by the PSD/CDS-PP government. "Allow me to put it this way: they don't give a damn about the concrete problems that people face every day," she said.

The PCP is proposing a rise in the national minimum wage to €1,050 and an increase in pensions of 5% or €75, she said.

The PCP's parliamentary leader challenged the tax benefits for “non-habitual residents, which are estimated to be in the region of €1.9 billion”, as well as the “privatisations, disposal of assets” and the “transfer of public resources to public-private partnerships (PPPs), amounting to €1.5 billion”.

According to the PCP's parliamentary leader, there are "transfers of around half of the National Health Service (SNS) budget to private groups".

"So we"re talking about a proposal that not only doesn"t solve the problems facing workers and the people in our country, but makes them worse," she concluded.

On 19 September, a government bill to reduce the corporate income tax rate by one percentage point per year, up to 17% in 2028, was approved in general in parliament, with PSD, CDS-PP, Chega, IL, PAN and JPP voting in favour and PS, Livre and PCP voting against. The specialised debate and final overall vote remain to be held.

The report on the proposed State Budget for 2026 includes, in a table titled “main budgetary policy measures with an impact in 2026,” the reduction of corporate tax by 1 percentage point, which will cost an estimated €300.

The PSD/CDS-PP government submitted the 2026 State Budget proposal to parliament today, one day before the deadline and three days before Sunday's local elections.

The proposed State Budget for 2026 will be discussed and voted on in general between 27 and 28 October. The final overall vote is scheduled for 27 November, after the specialised debate process.

In the macroeconomic scenario on which the budget proposal is based, the PSD/CDS-PP government expects Gross Domestic Product (GDP) to grow by 2% this year and 2.3% in 2026.

The second minority government headed by Luís Montenegro aims to achieve surpluses of 0.3% of GDP this year and 0.1% next year. As for the debt ratio, it estimates a reduction to 90.2% of GDP in 2025 and 87.8% in 2026.

IEL/ADB // ADB.

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