António Costa’s proposal to attract Portuguese emigrants back to the homeland, was launched at Socialist party congress: namely that residents of Portugal (whether or not nationals) who emigrated after 2014, and return before 2020, will be entitled to a 50% reduction of their income tax bill and will get their fare and moving costs paid.
After some stiff criticism, Costa says he is open to changes, "It is possible, from now until the final version of the State Budget, to improve this proposal."
Costa needs the plan to work, "The country, to continue growing, needs to increase its human resources. We are a country open to immigration but we should not refuse to attract to Portugal those Portuguese who emigrated, particularly those who emigrated recently. "
The PM is aware of the criticism his plan has triggered, "I have seen the first criticisms that our proposal does not solve the problem. Of course there is no silver bullet. Of course the essential thing is to have good offers of quality work. I said recently that we would do our part in the State Budget with the tax incentive but that companies would have to play their part in a new wage policy that is more attractive."
The Prime Minister was slammed for proposing a twin track income tax system, “In recent days, the incentive has been criticised for the discriminatory potential of an income tax reduction for returning migrants: another criticism is that this is discriminatory towards those who have stayed. To remember that those who stayed here was our first priority and that is why we define "employment, employment, employment" as a major objective of our economic policy.”
Costa tried to persuade his critics that his scheme is not discriminatory by summarising all the good things he has done to make the life of the working man a deep and lasting pleasure in this country:
“Over one thousand days, 315,000 new jobs have been created - three-quarters of which were permanent contracts. There’s been a 15% increase in the national minimum wage, an increase in average household income of 4.7%, the elimination of the income tax surcharge and the creation of new income tax bands which means families this year will pay €1 billion less in income tax than previously."
That is why, according to António Costa, his 50% proposal," is not discriminatory in relation to those who emigrated under different circumstances."
Costa said the non-habitual residents scheme for foreign immigrants, which will continue, gives tax breaks for ten years and that by comparison, his new proposal will have a shorter impact, between three and five years, to be confirmed.
António Costa reaffirmed the importance of the subject, "the problem is, at a time when we have a historically low unemployment rate, we have an enormous shortage of labour in many sectors of activity. The country suffered a very deep crisis that forced the emigration of a significant number of Portuguese, numbers not seen since the 1960s. Can we and should we give up on attracting them to return? Should we not create an incentive to do that?"
Between 2011 and 2017, 764 533 people left Portugal. The year with the most emigrants was 2014 with 134,624 people leaving, 85,052 only temporarily and 49,572 permanently.
