Finance Minister Joaquim Miranda Sarmento spoke this Friday about the new IRS Jovem regime, approved on Thursday, guaranteeing that it is "the measure that most reduces taxes" in the country's history.

"It will benefit all young people up to 35 years of age with income from work - dependent and independent. It is the measure that most reduces taxes, that I can remember, in the history of Portugal", he told reporters at the Faculty of Economics of the University of Porto.

Miranda Sarmento stressed that the measure did not "leave out any young person" between the ages of 16 and 35 who has earned income from work.

Asked about the criticism from the Left, who pointed out that the measure would benefit young people who earned more, the minister was assertive: "First, the Left thinks that taxes should not be lowered and, second, they think that people are already rich from a thousand euros. I can't do anything about that".

Miranda Sarmento, who met today with the president of the European Investment Bank, Nadia Calviño, was also confronted with the vote by the Socialist Party, saying: "It will decide in Parliament how it will vote, together with all the other parties".

What changes in IRS Jovem?

The regime approved on Thursday by the Government is aimed at income from work (categories A and B) of young people up to 35 years of age that does not exceed 81,199 euros in annual taxable income, and differs from the previous one in that, instead of granting an exemption, it reduces the IRS rates applicable to one third of the value of those currently applied to the first eight tax brackets.

Thus, and as explained by the Prime Minister, Luís Montenegro, in the Council of Ministers' briefing, young people up to 35 years of age will now pay an IRS rate between 4.4% and 15% - this being the maximum rate applicable to those with income at the level of the aforementioned 8th bracket.

To this end, there will be a table with the new rates that represent one third of the general rates that are currently in article 68 of the IRS code.

This model differs from the previous one in that there is a tax benefit for young people who have just completed their cycle of studies and which translates into an IRS discount, with an exemption of 100% of income being foreseen, up to a maximum amount of 40 times the social support index (IAS), in the first year of the measure.

In the second year, the exemption covers 75% of income, in the third and fourth years it is 50%, and 25% in the fifth and last year of the benefit - with the reduction in the exemption being accompanied by a reduction in the maximum annual income limit.

The secretary-general of JS said this Friday that the PS will oppose the IRS Jovem announced by the Government if the proposal is not changed and accused the executive of intending to deceive young people on the eve of the European elections.

[News updated at 16:29]

Read Also: PS warns that it will oppose the new IRS Jovem if the proposal is not changed (Portuguese version)