LISBON, Oct 4 Reuters Portugal39;s minority centreright government has watered down its proposals for two major tax cuts, aiming to convince the main opposition Socialists to allow the passage of the 2025 budget in parliament.

The Socialists said they would examine the new proposals and come up with a counterproposal next week. The government only needs the abstention of the main opposition party to guarantee the approval of the budget.

These proposals are in line with the Socialist Party39;s electoral programme… We must make every effort till the last minute to ensure the budget is approved, Prime Minister Luis Montenegro said after meeting Socialist leader Pedro Nuno Santos.

The Socialists said the government39;s original proposals would benefit higher earners more.

Under the new plans, the government would scrap a 15 cap on income tax for all young people and replaced it with a progressive scheme similar to what the Socialists want.

Those aged up to 35 and earning up to 28,000 euros 30,862 a year would have a 100 tax exemption in the first year of work, dropping to 75 from the second to the fifth year, 50 between the sixth and ninth and 25 in years 1015.

Current income tax rates range from 13 to 48.

The government estimates the new plan will cost 645 million euros 712 million in 2025, while the cap would have cost 1 billion euros.

The new plan also envisages cutting corporate tax by one percentage point to 20 in 2025, not by two points as previously…