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Portugal gives up on controversial tax levy

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Portugal gives up on controversial tax levy


Portugal’s government has agreed to negotiate alternative solutions to a social security tax hike that has sparked angry protests.

After an eight-hour meeting of the presidential state council that was besieged by protesters, the council said negotiations would now go ahead between the government, unions and employers.

The plan to up the social security levy for workers from 11 to 18 percent has undermined a reluctant acceptance of austerity in Portugal.

Under pressure, Prime Minister Pedro Passos Coelho promised on Friday to “listen to the country” after huge street demonstrations last weekend and criticism of the plan from union and business leaders.

The government is battling to meet the strict conditions of last year’s EU/IMF bailout.

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