Portugal's new govt starts reversing austerity measures, reduces surtax for most families

Portugal's new anti-austerity government is making good on its promise to put more money in people's pockets, reducing or eliminating for most families a 3.5 percent super tax on monthly pay introduced during the country's financial crisis.

Fernando Rocha Andrade, secretary of state for fiscal affairs, said Tuesday the tax will be eliminated next year for households with income below 7,000 euros ($7,660) a year, while households earning up to 20,000 euros will pay a reduced rate of 1 percent. Around 20 percent of households — some 1 million families — fall within those income brackets.

Rocha Andrade said only the 12,000 or so households earning over 80,000 euros a year will keep paying the 3.5 percent rate. He said the changes will cost the Treasury around 430 million euros.