Portugal is making a bold move to attract young professionals by proposing a decade of tax breaks aimed at individuals under 35. This initiative is part of a broader strategy to combat the ongoing brain drain as many young Portuguese seek better opportunities abroad.
The Tax Break Proposal
The Portuguese government, led by Prime Minister Luís Montenegro, has unveiled a plan to offer substantial tax incentives to young workers. Under this proposal, individuals aged 35 and under who earn up to €28,000 will enjoy a 100% tax exemption in their first year of employment. The tax burden will then decrease progressively over the next ten years:
- Year 1: 100% tax exemption
- Years 2-4: 75% tax exemption
- Years 5-7: 50% tax exemption
- Years 8-10: 25% tax exemption
This initiative is expected to benefit between 350,000 and 400,000 young people, providing them with a financial cushion as they start their careers.
Portugal has been grappling with a significant brain drain, with approximately 850,000 young people having emigrated in search of better job prospects. The government aims to reverse this trend by making the country more attractive to its youth. The average annual salary in Portugal is around €20,000, and many young professionals find it challenging to make ends meet due to high living costs and low wages.