Portugal is taking significant steps to retain its youth and attract foreign talent by introducing substantial tax cuts for individuals aged 35 and under. This initiative, part of the budget presented by Prime Minister Luís Montenegro’s government, aims to combat the ongoing emigration of young Portuguese citizens and make the country more appealing to young expatriates.
The proposed tax cuts are designed to alleviate the financial burden on young people in Portugal. Currently, individuals earning just under €20,000 are taxed at a rate of 26% on income exceeding approximately €16,500. Under the new plan there would be a progressive tax structure aimed to provide immediate relief while gradually increasing the tax burden over a decade.
Portugal has seen a significant outflow of young talent in recent years, with approximately 30% of citizens aged 15 to 39 living abroad. The government hopes that these tax incentives will encourage young people to remain in Portugal and contribute to the economy.
Prime Minister Montenegro has emphasized the need to retain young talent, stating that the government aims to provide them with the future they deserve. Youth Minister Margarida Balseiro Lopes highlighted the high financial cost of the tax cuts but argued that the cost of losing a qualified generation is far greater.