While the details of the budget are very comprehensive, The Portugal News has outlined the main factors highlighted in the budget.
The budget proposes a rise in unemployment allowance next year from €438,81 to a value close to €505 . Currently, the minimum amount of unemployment benefit is 100 percent of IAS unless the value of the reference remuneration is less than this amount €438.81.
In addition, the government will create a new benefit for those who are unable to access unemployment benefit. State support will be called “extraordinary support for workers' income” and aims to ensure that no one falls below the poverty line. It has a variable value depending on the recipient.
Older and smaller Social Security debts can be forgiven starting next year. According to a preliminary version of the budget, the Government may be authorised to forgive amounts when a "debt for contributions, benefits or rent is 20 years old or more or alternatively less than €50€ and is ten years old or more".
In health, the government has decided to reinforce investment in primary health care to the tune of €90 million. This reinforcement will be used to “improve the quality of facilities and equipment to diversify the amount of available services” and “internalize the responses in complementary means of diagnosis and therapy in institutions and public health services”.
Another goal of the investment is to “reinforce the offer of integrated mental health care in all health regions and to create residential responses for people with chronic mental disorders in psychiatric hospitals”, according to the document.
According to the State budget for 2021, more hospitals will be built to be launched by 2023. The new hospitals will be the Pediatric Hospital integrated in the Centro Hospitalar de São João, in Porto, and the future units in East Lisbon, Seixal, Sintra, Alentejo and Madeira.
The environment also was on the priority list. So, the proposed budget noted that it is necessary to “prepare the National Electric System for the end of the production of electricity from coal” to guarantee the closure of “two coal-fired power plants” [Pego and Sines] by the end of 2021.
Portugal has committed to the European Union to reach a goal of 47 percent of renewable energy in gross final energy consumption by 2030, so the objective is to “double the installed capacity” of these sources before that year.
In order to guarantee these measures, “the elimination of environmentally damaging tax incentives, such as exemptions associated with the use of fossil fuels and carbon tax exemptions”, and new tax incentives for electric mobility will continue next year.
In 2021, solar energy production is also a priority. The licenses already awarded in 2016 will start operating, which will almost double the photovoltaic solar energy capacity by 700 megawatts, with the goal of reaching 1.5 gigawatts by the end of the year.
The Vehicle Tax (ISV) is a tax associated with registration that is, it is paid only once when the vehicle is registered for the first time in Portugal, whether new or used. Brussels condemned Portugal, and the Portuguese government has changed the taxation of imported used vehicles. Portugal will correct the ISV for second-hand cars that are imported. Several owners have appealed to the court for the State to return the amounts paid on imports.
Also support for the purchase of electric cars (from private individuals and state agencies) and the reinforcement of the network of quick charging stations will continue.
The government estimates that "for 2021 the Portuguese economy will recover, with a real GDP growth of 5.4 percent, in view of the strong contraction of 8.5 percent estimated for 2020".
Another measure of the budget will benefit people who attend gymnasiums, who will now be able to partially discount the IVA paid at gymnasiums on their IRS, in a similar way to the deduction that is currently given to expenses in restaurants, workshops, hairdressers and hair salons.
Companies linked to offshores did not receive social supports. As companies with fiscal centers in countries, territories and regions with privileged tax regimes, "clearly more favorable", will be excluded in the next year from the support created under the exceptional and temporary measures to respond to the pandemic. At issue are as entities with the center of the company or effective direction in offshores that appear on the list prepared by the Portuguese Tax Authorities, as well as companies that are dominated by fiduciary structures that are in the same conditions or whose beneficial owner is domiciled in those countries, territories or regions".
Not forgetting education, the government will hire three thousand more employees for schools next year. The objective is to guarantee the launch of tendering procedures for the additional hiring of 3,000 professionals, so that schools have operating assistants operated to satisfy permanent needs”, the budget mentions. It should be noted that the need for an increase in the number of employees is now even more urgent in order to comply with the contingency plans of Portuguese schools.