Américo Oliveira Fragoso is quoted in an article in the Expresso newspaper entitled "Raises below 4.7% may also have tax benefits", in which he details the impact of the changes introduced by the 2025 State Budget to the tax incentive for companies that increase workers' salaries.

The new government's proposal, which aims to encourage organisations to increase workers' salaries by an average of 4.7%, is considered by Expresso to be a "more generous and far more comprehensive incentive than the current model". Experts consulted by the newspaper explain that the main change lies making the criteria for increases more flexible. With this change, companies can benefit from the tax incentive by calculating the average of the salary increases granted, without the need for all workers to receive exactly 4.7% increase. This allows companies that grant smaller increases to some workers to still benefit from the incentive, as long as the overall average reaches the required level.

Américo Oliveira Fragoso explains that "the base remuneration results from a legal designation and includes the worker's base salary. The fixed remuneration, on the other hand, includes this base remuneration and regular and periodic allowances paid to the worker". Despite the immediate advantages, the VdA lawyer explains that the new model could be more demanding for companies in the long term. "There is a contamination of costs, because, by increasing the base, I am also increasing all the allowances that depend on it", he adds.

  • This article is available here.