Tuesday , January 19 2021

Other battles in the Budget: the most risky actions



The bullfighting dispute against bullfighting like a boy's game is compared to the potential budgetary impact and political damage that can be carried out by other actions if non-governmental parties (leftists support the Executive in Parliament and right-wing opposition) or complicate the 2019 budget plan .

There are many potential "negative coalitions" that could jeopardize the Government's strategy for the 2019 State Budget (SO2019).

By reducing VAT on theater performances from 13% to 6%, contrary to what the government means, it can have limited financial effects and can be easily supplied with adjustments to the income or expenditure side, but has been broken in the PS parliamentary bench. A group of deputies announced that they would vote in favor of tax breaks, in absentia from party leaders and prime minister, António Costa.

But these are crumbs compared to, for example, the impact of a negative coalition ultimately between left and right to force the government to calculate the entire career time of the teacher has been frozen.

At the government level, the advancement of the careers of these professionals (assuming a limited amount of time of only two years, nine months and 18 days, according to Executive wishes) will cost 658 million. But PCP, BE and PSD (and even finer, CSD itself) have shown that they can gather and return to documents, forcing the government to negotiate with trade unions regarding the terms of salary reimbursement (this is what is right).

If you count nine years, four months, and two days, according to the wishes of the teachers, the cost of measurement (said the government) almost doubled to 1154 million euros. There is an expenditure of more than 500 million euros. This is equivalent to 0.3% of gross domestic product (GDP), more than the estimated deficit of 0.2% for 2019.

On Friday in Parliament, Finance Minister Mário Centeno felt the need to warn the parties that this strategy to defend and that the debate in specialization "could not endanger the recovery efforts of income, trust and respect for the Portuguese." The next two weeks, until November 29 (when OE is finally elected) will determine the extent to which the partners pay attention to the minister's request.

The teachers

That could turn out to be the biggest Gordian knot for Finance to release. The PCP wants the time count of teachers for career development purposes to be fully considered (nine years and the like). Disbursements will be carried out in stages over seven years, starting in 2019. The Left Block also provides gradual but faster disbursement: a maximum of five years for teachers and careers and other specialized agencies, the police. The BE goes forward with other nuances. If no agreement is reached with trade unions by the end of this year, return on income is made at a rate of 20% per year starting at the beginning of 2019, ending in 2023. PSD, for its part, wants to force the government to return to the negotiating table with the union, recovering 2018 Budget standard regarding career awards.

Additional ISP

PCP was surprised on Friday afternoon by presenting a change proposal that returned Tax on Petroleum Products (ISP) to gasoline and diesel to 2016, when the Government increased them to face VAT revenues as a result of a sharp decline in oil prices. The finance minister has announced the end of three "extra" cents for gasoline, but the communists want the same for diesel and believe negotiations with the executive will pay off. PCP wants a regulation that reduces tariffs to take effect this year. Again, there may be a "negative coalition" with PSD and CDS, which are always opposed to increasing ISPs. At the end of October, Live Money asked Finance for the value of loss of income in the case of gasoline, but remained unanswered.

VAT from bullfighting

More than the impact of the budget, this is a political problem with parts of the PS bench to go head-to-head with the Government. Socialist Parliament leader Carlos César announced that the proposal to reduce VAT on human fights against minimum interest rates would actually take place and have a PCP next to who wants to change OE2019, reduce VAT on all shows by up to 6% (including bullfights). CDS can clearly join and some members of the PSD parliament also signaled support for the cause of bullfighting. The BE runs in the opposite direction: all arts and cultural performances must be taxed at 6%, except for bullfighting, which should be compounded to 23%.

Update the IRS to inflation

In the debate on Friday, the government closed the door to increasing the IRS to the inflation rate in 2019 (1.3%), but here might also be an insult. CDS has presented a proposal to prevent what it considers to be "a veiled increase in the IRS," said female congressman Cecília Meireles. And because of that, it joins PCP rights which require an increase in rank to maintain family purchasing power. The impact could be around 60 million euros (loss of taxpayers with non-renewal), this week Jornal de Negócios reported.

Cost of civil protection

The government also wants to make a contribution to the municipality of Civil Protection, bypassing the leadership of the Constitutional Court, which has forced the Lisbon Room to return to the population collected. PSD announced a opposing vote, calling for revocation of standards, such as BE and CDS. PCP also opposed, proposing an alternative allocation of insurance premiums to the city civil protection system.

Real Estate Tax

Among the hundreds of amendments to OE2019, many were aimed at changes in property taxes. At the beginning, proposals from the left (CDU and BE) and right (PSD and CDS) will be called by PS. The risk here is lower, but there may always be a surprise because housing is the most sensitive area for the Portuguese. And for parties too, especially with the 2019 election approach.

PCP insisted on the size of last year. You want to reduce the maximum IMI level from 0.45% now to 0.4%. The block also understands that IMI has a downward margin of 0.4% and also cities in financial sanitation can no longer improve IMI by 0.5%. PSD maintains not stirring at the maximum level, but at a minimum, it is proposed that this ranges from 0.3% to 0.25%. Last year, Social Democrats joined PS and defeated the PCP proposal.

Then there is the problem with the IMI add-on. PSD wants to eliminate this tax, which debuted in 2017, and replaced the old stamp tax regime on luxury real estate (worth more than one million euros). The CDS-PP proposes the abolition of buildings located in the interior and on the left is the intention that the two levels of value and existing taxes add one more. PCP maintains a 1.5% rate for assets that exceed 1.5% million euros and BE defends 2% for properties that exceed 2 million euros.

Finally, the level of speculation on real estate. BE and PSD advanced with the idea of ​​deteriorating real estate surpluses. This taxation will be even greater the shorter the time the property is in the hands of those who sell.



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