The amount exceeds the impact that was contemplated in the bill approved by the government on 19 April to reduce IRS rates between the 1st and 8th taxable income brackets, but which ended up being made unfeasible, with parliament approving the PS proposal to reduce rates (up to the 6th bracket).

In addition to the difference in the design of the rate reduction, other changes to the IRS were also approved, namely the update of the specific deduction (which was frozen at 4,104 euros and which will now be updated in line with the Social Support Index), the increase in the minimum subsistence amount or the deduction with the house rent.

Overall, the various changes to the IRS will therefore have a total impact on revenue of 1,100 million euros between this year and next, with estimates indicating that the impact in 2024 will be around 650 million euros.

When the Government approved its proposal to reduce IRS rates in April, it estimated that the measure would have an impact of 348 million euros this year, to which 115 million euros would be added in 2025, via reimbursement, for a total of 463 million euros.

The new 2024 accounts (which point to 650 million euros) include the new withholding tax tables, which were released today and will reduce the monthly tax paid by workers and pensioners.

This relief through withholding tax will have a more significant impact on taxpayers' pockets in the months of September and October, months in which the IRS 'discount' will be lower - and for many, it will be zero euros.

A government source states that the new IRS withholding tax tables that will be in force from 1 September onwards, in addition to increasing the net income of Portuguese families, ensure that no taxpayer is disadvantaged by the situation that would result from the application of the tables in force.

In addition, the same source indicated, that the new withholding tax tables "do not compromise the balance of public accounts, nor the budget surpluses forecast for 2024 and 2025".