Portugal’s Finance Minister, Joaquim Miranda Sarmento, has confirmed that the government intends to continue reducing the tax burden if public finances allow it.

Speaking at a conference organized by the newspaper Diário de Notícias in Lisbon, the minister said that personal income tax rates for individuals earning more than €40,000 per year remain high compared with those in a number of other countries.

According to Sarmento, any further tax cuts will depend directly on budget performance. If the country’s fiscal position remains strong, the government is prepared to review tax rates and reduce them further. The government has already cut taxes by approximately €3 billion, around €2 billion of which came from reductions in personal income tax.

Changes are also planned for businesses. The government aims to gradually reduce the standard corporate income tax rate to 17% by 2028. After that, authorities intend to consider easing additional surtaxes applied to large companies with profits exceeding €1.5 million.

Despite the tax cuts already underway, Portugal’s tax burden on businesses remains among the highest in Europe. While the headline corporate tax rate currently stands at around 20%, municipal and state surtaxes can push the combined rate above 30% for profitable companies. According to the Tax Foundation, once all surtaxes and additional levies are taken into account, Portugal has the highest effective tax burden on corporate profits in the European Union.

For many expatriates and entrepreneurs, this has become one of the most important economic issues in recent years, and it is likely to remain closely watched as the government’s tax plans evolve.