Following a marathon 20-hour plenary session that ended on Thursday, the Portuguese government approved a raft of radical proposals for its 2013 budget slated to be tabled in parliament on Oct. 15.
The meeting, which began on Wednesday, was chaired by the PSD-CDS coalition led by Portuguese Prime Minister Pedro Passos Coelho.
According to a government statement, the bill is intended to fulfil requirements set out in the multilateral agreement Portugal signed with the Troika, a body made up of the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission.
The proposal, which will be posted in its entirety Monday, includes measures to "strengthen the conditions for the growth of the Portuguese economy," according to Secretary of State for the Presidency of the Council of Ministers Luis Marques Guedes.
For his part, the Finance Minister Vitor Gaspar announced last week he intended to raise the average tax rate to 13.2 percent next year from 9.8 percent at present.
Portugal, battling deep economic recession and record unemployment, is also bracing itself for a higher property tax and an end of a safeguard clause, which will have a significant impact on many homeowners. The removal of the safeguard clause in the property tax bill was one of the main surprises of last week's announcement as 5.2 million of Portugal's properties are expected to be revalued.
These new rates bills will be payable in full replacing a previous cap on the increase of 75 euros (97 U.S. dollars), a third of the difference between the new rate and the property tax IMI paid in 2011.