The State Budget proposal for 2027 aims to boost Portuguese incomes and continue the country's transformation, with a focus on tax reduction, improved public services, and structural investment. The goal is to prepare Portugal for future challenges while preserving fiscal balance.
During the proposal's presentation, the Minister of State and Finance, Joaquim Miranda Sarmento, highlighted a 2027 macroeconomic scenario with a projected growth of 2.1% and a debt reduction to 84.5%, maintaining public finances in positive territory. Portugal was the third EU country to most reduce its public debt between 2023 and 2025, justifying five consecutive upgrades to the Republic's rating.
The budget prioritizes income enhancement through tax cuts, salary increases, and protection for the most vulnerable. It does not foresee tax hikes or an update of special consumption taxes to the inflation rate. Personal income tax (IRS) sees its sixth reduction since 2024, with updated tax brackets, specific deductions, and a minimum existence threshold, representing a tax relief of approximately 550 million euros.
The national minimum wage will rise to 970 euros, and the reference value for the Solidarity Supplement for the Elderly will increase by 50 euros to 720 euros per month. Public administration employees will receive salary updates of 60.52 euros or 2.30%, as per the Multiannual Salary Valorization Agreement. Over 50 agreements and revisions of more than 35 career paths are planned, benefiting over 350,000 Central Administration workers. Support for families and professional sectors most affected by rising fuel prices will also continue through tax relief on ISP (excise duty on petroleum products).
The proposal continues the reduction of corporate taxation, with Corporate Income Tax (IRC) rates projected to be 18% in 2027 and 17% in 2028, aiming to enhance competitiveness and promote investment. In Housing, emphasis is placed on increasing public housing supply, maintaining support for first-time homebuyers (IMT and IS exemptions), and fiscal measures to boost construction, such as reducing VAT from 23% to 6% and the IRS rate on moderate rents from 25% to 10%.
The Budget deepens the strategy initiated in 2024, centered on putting people first, building a more efficient state, and valuing the territory. Efficiency involves administrative simplification, digital transformation, security, and a regulated migratory policy. Territorial valorization focuses on cohesion and attracting investment, innovation, and business activity, with 5.7 billion euros made available by the Portuguese Development Bank.
The continuation of public investment beyond the Recovery and Resilience Plan (PRR) is foreseen, by accelerating Portugal 2030 and through State Budget financing. The Minister of State and Finance stated, "We will have to accelerate Portugal 2030 and, on the other hand, continue to have funds from the State Budget for more public investment."
