Tuesday , October 4 2022

Other bullfighting in the budget: the most dangerous measures


The dispute over VAT on bullfighting is like a game of boy compared to the likely fiscal impact and political damage that other measures can bring if non-governmental parties (the left that support Parliament in Parliament and the right-wing opposition) or complicate the 2019 budget plans.

There are many potential "negative alliances" that could jeopardize the government's government budget strategy for 2019 (SO2019).

By reducing VAT on theatrical performances from 13% to 6%, contrary to the government's intention, it may have a limited economic impact and can easily be accompanied by any adjustment in terms of revenue or expenditure, PS parliamentary committee. A group of MPs announced they would vote for a tax cut, in the absence of the party leader and Prime Minister António Costa.

But this is a crumbly comparison, for example, with the implications of a potential negative coalition between the left and the right to force the government to count all the time that the university careers have frozen.

At the government level, the career development of these professionals (which requires a limited period of only two years, nine months and 18 days, as the executive wants) will cost 658 million. However, PCP, BE and PSD (and more closely the CSD itself) have already shown that they can converge and return to the file, forcing the government to negotiate the terms of wage replacement right with the unions.

If you measure the nine years, four months and two days, as teachers want, the cost of the measure (says the government) almost doubles to 1154 million euros. There are over EUR 500 million in costs. It corresponds to 0.3% of gross domestic product (GDP), more than the projected deficit of 0.2% for 2019.

On Friday in Parliament, Finance Minister Mário Centeno considered the need to warn the parties that the strategy should be maintained and that the debate in the specialty "can not jeopardize the recovery effort, the income, the trust and the respect of the Portuguese . Over the next two weeks, until November 29 (when the OE will finally be voted), it will dictate to what extent partners take note of the minister's request.

The teachers

It could prove to be the largest hub of the Gordian economy to disconnect. The PCP wants to fully study the time taken by teachers to count on their career progression (the nine and the years). Defrosting will begin for a maximum of seven years, starting in 2019. The Left Block also provides for a gradual but faster thawing: maximum five years for teachers and other special careers and organizations, the police. BE moves in another shade. If agreement with the unions is not reached by the end of this year, the return on income is at a rate of 20% per annum, beginning in the early 2019 and ending in 2023. PSD, for its part, wants to force the government to return to the negotiation table with the trade unions, to regain the 2018 model for career development.

Additional ISP

The PCP surprised on Friday afternoon with the presentation of a proposal for an amendment restoring petrol and diesel fuel taxes (ISPs) to 2016 prices when the government increased its VAT revenues as a result of the sharp fall in the price of the oil. The Finance Minister had already announced the end of three minutes "extra" for gasoline, but the Communists want the same for diesel and believe that negotiations with the executive will succeed. The PCP wants the decree reducing the rates that will be in force this year. Again, there may be a "negative coalition" with PSD and CDS, which have always questioned the increase in ISP. In late October, Live Money asked for funding for the value of revenue loss in the case of gasoline, but remains unanswered.

VAT of bullfighting

More than the impact on the budget, this is a political issue with part of the CP going straight ahead with its government. Socialist Party parliamentary leader Carlos César announced that the proposal to reduce VAT on bullfighting to a minimum would go ahead and the next PCP gateway wants to change OE2019 by reducing VAT on all performances to 6%. CDS can clearly be included and some PSD members have also indicated support for the cause of bullfighting. BE goes in the opposite direction: all artistic and cultural events should be taxed at 6%, except for bullfighting, which should deteriorate to 23%.

Influence of the IRS on inflation

In the debate on Friday, the government closed the door to upgrading the IRS to its inflation rate in 2019 (1.3%), but this could also be a break. The CDS has made a proposal to prevent what it considers to be a "covert increase in IRS," said the centrist leader, Cecília Meireles. This connects the right to PCP that requires classroom upgrading to maintain the purchasing power of families. The impact could be about 60 million euros (the loss of taxpayers with non-disclosure), this week Jornal de Negócios said.

Civil Protection Fees

The government also wants to create a municipal contribution of civil protection, bypassing the head of the Constitutional Court, which has already forced the Chamber of Lisbon to return to the sums of residents gathered. The PSD announced the opposite vote, asking for the abolition of the standard, such as BE and CDS. PCP is also the opposite, suggesting alternatively the allocation of premiums to the municipal civil protection system.

Property taxes

Among the many hundreds of amendments to OE2019, many are aimed at changes in real estate taxes. At the beginning, the proposals of the left (CDU and BE) and the right (PSD and CDS) will be called by the PS. The risk here is lower, but there can always be surprises, as housing is the most sensitive areas for the Portuguese. And for the parties, especially with the 2019 elections.

The PCP insists a measure from the previous year. You want to reduce the maximum IMI from today's 0.45% to 0.4%. The bloc also understands that IMI has the margin to fall to 0.4% and also that municipalities in the economic sewer can no longer determine IMI by 0.5%. The PSD does not defend the maximum rate, but to a minimum, suggesting that it ranges from 0.3% to 0.25%. Last year, the Social Democrats joined the CP and defeated the PCP proposal.

Then there is the problem of the IMI add-on. The PSD wants to eliminate this tax, which debuted in 2017, and replace the old tax regime for luxury real estate (worth more than one million euros). The CDS-PP proposes its elimination for buildings inside and to the left the will is that the two levels of values ​​and existing taxes add another. PCP defends 1.5% for assets exceeding 1.5% in millions of euros and BE protects 2% for real estate over 2m euros.

Finally, the rate against real estate speculation. BE and PSD proceeded with the idea of ​​worsening surplus real estate. This tax will be even greater, the less the moment a property is in the hands of those who sell.

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