OE2022: what is known about the Budget that will be delivered this Monday at the Assembly of the Republic

The State Budget for 2022 (OE2022), whose general lines have already been presented to the parties on Wednesday, forecasts a 5.5% growth next year and a 3.2% deficit.

The document will have to be delivered to the Assembly of the Republic (AR) this Monday and the first discussion process will last between October 22nd and 27th, the day on which the document will be voted in general.

The following day, and in case of approval in the generality of the document, the OE2022 specialty will begin, with several hearings of the different ministers and entities in the parliament, a phase that will last about a month.

The parties will have until November 12 to submit their proposed amendments to the Government document, and the final global vote is scheduled for the 25th of the same month.

Asked about the document, Prime Minister António Costa guaranteed on Friday that the State Budget will pay “particular attention” to both the middle class and the new generations.

It is a process that is always delicate, of course, particularly delicate at a time when we have come out of a situation as difficult as a major economic crisis, a large drop in revenue with a large increase in expenses.”, creased.

Here are some key points of what is already known about OE2022:

GOVERNMENT WANTS TO MERGE WITH THE IRS BUT GUARANTEES THAT THE TAX LOAD DOESN’T RISE

On September 6, in an interview with TVI, the prime minister stated that his government is working so that the next Budget introduces IRS divisions between 10 and 20 thousand euros and between 36 and 80 thousand euros.

In reaction, the Minister of Finance, João Leão, said that the Government is preparing, “with seriousness and responsibility”, the revision of the IRS levels in the State Budget for 2022, leaving the “guarantee that there will be no increase in the burden Supervisor”.

This has been one of the most commented measures for what it can mean to the tax burden on citizens.

Paulo Portas, for example, argues that the tax system should be an incentive to productivity, encouraging citizens to want more income and not the other way around.

ECONOMIC GROWTH OF 4.6% IN 2021 AND 5.5% IN 2022

The figures relating to economic growth were released on Wednesday by the parliamentary leader of the PCP, João Oliveira, after meeting with the minister of State and Finance, João Leão, who presented the general lines of OE2022 to the parties.

DEFICIT OF 3.2%, PUBLIC DEBT IN 123% AND UNEMPLOYMENT IN 6.5%

As for other values ​​foreseen in the macroeconomic scenario presented by the Government, their disclosure was made by José Luís Ferreira, parliamentary leader of the PEV.

According to the words of the ecologists, based on the information received from the Government, the deficit in public accounts should reach 3.2% next year, the public debt should reach 123% of the Gross Domestic Product (GDP) and unemployment will remain at 6 .5%.

COUNTRY RETURNS TO PRE-PANDEMIC LEVEL IN 2022

The Deputy Secretary of State and for Fiscal Affairs, António Mendonça Mendes, was “optimistic” that Portugal will return to pre-crisis levels of wealth as early as 2022.

“The numbers we are working on are clearly above what the Stability Program was designed to do. I remember that today [quarta-feira] Banco de Portugal spoke of a 4.8% growth for this year – and we are still fine-tuning the final figure. But growth will be well above the 4% forecast. It will also be above the 5% forecast for 2022”, he said.

According to the Secretary of State for Fiscal Affairs, “in the aggregate of the two years, Portugal will have the capacity to return to pre-pandemic levels of wealth”.

GOVERNMENT PREPARES TAX INCENTIVES FOR COMPANIES THAT INVEST

On Wednesday, the vice-president of the parliamentary bench of the PS João Paulo Correia PS announced that the Government is preparing for the next State Budget incentives for companies that invest to pay less IRC, without giving further details.

GOVERNMENT PROPOSES INCREASES OF 0.9% IN PUBLIC SERVICE

On Thursday, the government proposed to the civil service unions a salary update of 0.9% for the next year, according to the leader of the Frente Comum, Sebastião Santana.

The proposal for salary increases for the civil service in 2022, presented to unions, will cost around 225 million euros gross, said the president of the Union of Technical Staff, Helena Rodrigues, citing government data.

The minister of State Modernization and Public Administration, Alexandra Leitão, attributed her change of position in negotiations on salary increases for civil servants to the review of the macroeconomic scenario presented by Finance on Wednesday.

Asked by journalists about the reason for the change in position taken three days earlier, the minister said that what had changed was “a rising review [do cenário macroeconómico da proposta de Orçamento do Estado para 2022], in the presentation that the Minister of Finance made at the Assembly of the Republic yesterday [quarta-feira] in the morning”.

GOVERNMENT PROPOSES “DEFINITIVE CONSECRATION” OF PENSION SUPPLEMENT

The Government proposed to the unions the “definitive consecration” of the supplement for hardship and unhealthy conditions for operational assistants with functions in the area of ​​garbage collection and street cleaning, among others.

The supplement is awarded for each working day and varies depending on the level of unhealthy or difficult conditions, being fixed at 3.36 euros for a low level and 4.09 euros for a medium level.

ELECTRICITY VAT NO CHANGES

The Ministry of the Environment said on October 2nd that no proposal will be presented to change the VAT on electricity for the next State Budget and that “not even justified”, after Minister Matos Fernandes defended that VAT on electricity electricity is a matter that “naturally” will be discussed in the State Budget, noting that this tax has dropped to almost 85% of domestic contracts.

“In terms of the State Budget, the ‘ceiling’ below which the VAT at a reduced rate may or may not be varied may be discussed,” said João Pedro Matos Fernandes, in an interview with TSF and Dinheiro Vivo.

In the note to Lusa, the ministry stated that, “to avoid any doubt about the statements made by the minister of Environment and Climate Action, in the TSF/Dinheiro Vivo interview, issued and published today [sábado], October 2, informs that no proposal will be presented to change the VAT on electricity for the next State Budget, nor is it justified”.

GOVERNMENT MUST ACCOMMODATE EXPENDITURE OF MORE THAN 2,000 ME

The Government will have to accommodate an additional expenditure of 2,053.8 million euros in the State Budget for 2022, relating to measures already committed and with an impact next year, especially with salaries, structural investments and pensions, according to the Table of Invariant Policies sent to the Assembly of the Republic.

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