In the run-up to the upcoming election in Portugal, Prime Minister Luis Montenegro has reiterated his commitment to implementing tax cuts and boosting wages in a bid to win over voters.
Speaking in Lisbon recently, Montenegro outlined his government's plans to further reduce the corporate tax rate from 20% to 17%, with small and medium-sized businesses set to benefit from a lower rate of 15%. Additionally, he pledged to slash personal income taxes by up to €2 billion over the next four years and raise the minimum wage to €1,100 per month by 2029, up from the current €870 per month.
In terms of defense, Montenegro announced that Portugal will expedite its efforts to meet NATO's target of defense spending equivalent to 2% of GDP, a goal initially set for 2029. Despite these commitments, the government remains focused on maintaining fiscal discipline, aiming to achieve budget surpluses each year, with a projected surplus of 0.3% of GDP for the current year.
The upcoming election, scheduled for May 18, comes after Montenegro's center-right minority government was defeated in a confidence vote, prompting the need for a new government. Montenegro, seeking re-election, faces a tough battle against Socialist leader Pedro Nuno Santos and his party, the main opposition.
Recent opinion polls have shown a tight race between Montenegro's AD coalition and the Socialists, with varying margins separating the two contenders. With both parties vying for voter support, the outcome of the election remains uncertain, setting the stage for a closely contested showdown between the competing political forces in Portugal.