New austerity measures including a rise in income tax have been announced by the Portugese government.
The measures are meant to replace earlier proposals that met stiff popular opposition, AAP reports.
Finance Minister Vitor Gaspar on Wednesday announced an extraordinary tax of 4% and said that Portugal's income tax brackets would also be reduced from eight to five.
Without indicating how much extra revenue would be raised by the measure, Mr Gaspar said the average tax rise would be from 9.8% in 2012 to 13.2% in 2013.
"The adjustment is harder than we anticipated."
He also revealed that the unemployment forecast for 2013 has been raised to 16.4% from a previous forecast of 16%.
New measures also include new levies on capital gains and a financial transaction tax, though details of these moves are yet to be finalised.
