But the scheme may not get off the ground because Mr Montenegro’s ruling alliance, led by his centre-Right PSD party, does not have a majority in Portugal’s unicameral parliament.
Mr Montenegro was elected in March after a narrow victory over the Socialist Party, which was called after Antonio Costa, the former prime minister, resigned over corruption allegations.
He has ruled out working closely with Chega, an upstart populist anti-immigration party that won 50 out of 230 seats in the Assembly of the Republic – a record for the far-Right. Andre Ventura, Chega’s leader, has expressed support for a low-tax regime for young people.
Pedro Nuno Santos, the socialists’ leader, has not yet revealed whether his party will back the budget, but it has negotiated changes to some of the government’s proposals, including bigger tax breaks for the lower earners.
Mr Santos is against the government’s plan to reduce corporation tax for businesses.