Budget raises taxes and envisages retrenchment of 12,000 public-sector staff as recession grips the economy.
Portugal's government has announced its 2013 budget, which outlined the harshest measures yet under the country's $101bn rescue plan.
Vitor Gaspar, finance minister, confirmed on Monday that the average income tax rate would rise from 9.8 per cent to 11.8per cent.
He said the budget was the only way for the country to meet its targets under the bailout.
The government also announced spending cuts worth $3.4bn, while around 12,000 public-sector workers were to lose their jobs.
The cuts are intended to reduce the budget deficit of Portugal to 4.5 per cent in 2013, which is still 1.5 per cent more than the target of three per cent set by the European Union.
The budget faced opposition from anti-government protesters, as protests took place outside the parliament buildings.
Al Jazeera
Portugal unveils austere 2013 budget