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Countries compete to keep skilled young workers

Published 3 weeks ago3 minute read
the 38 member countries of the OECD.

"This is a tax regime that is an enemy of qualified work and professional success. This regime will not solve this problem," adds Mr Vasques.

Mr Vasques, also a former secretary of state for tax affairs in the early 2010s, adds: "I also cannot imagine a young professional deciding to move to Portugal just because of an extra couple hundred euros at the end of the year.

"Not even a low-skilled worker will make a decision based on that. Portuguese food works probably better as an incentive to move here than that tax regime".

Getty Images A food hall in WarsawGetty Images

Poland also has measures in place to keep young people from heading abroad

Rita de La Feria, chair of tax law at the University of Leeds, reminds that the exodus of young people isn't just a Portuguese problem, and that Europe is grappling with the challenges of young emigration.

According to a study requested by the Portuguese Parliament, as of July, in the European Union Portugal, Poland and Croatia had special tax regimes based on the taxpayers' ages.

"The challenges are very obvious: worker mobility is higher. The problem is that the country spends very large amounts on training for them to leave for other countries as soon as they enter the workforce," she said.

Ms de La Feria, who moved to the UK at a young age, told the BBC that when she left Portugal she did not intend to "leave for good: many leave their countries of origin thinking they will come back at some point. But once they form a family, it's almost impossible to return."

Antonio Almeida Antonio Almeida wrapped up in a big red scarf and coatAntonio Almeida

"Low salaries" the problem in Portugal says Antonio Almeida

Antonio Almeida, a software engineer like Mr Dias, left Portugal during the pandemic in late 2020 for a job in Berlin, right after finishing his degree. He would change the German capital for Brussels two years later. All his work experience was done abroad.

"Back in 2020, we were offered monthly salaries of €1,300, gross, in Lisbon. Berlin offered me €4,200 for a junior role."

Even with a 40% income tax rate in Germany, there was a considerable net gain. "It wasn't a difficult decision," says Mr Almeida.

Now in Belgium - where taxes are higher, he stresses - returning to his homeland isn't a priority. "I think of returning eventually, mainly for family reasons.

"But at the moment my life standards are very high and I like the way of life of central Europe. And the main problem in Portugal is low salaries, not taxes."

Mr Almeida does not consider the Portuguese tax changes as a major factor when thinking of the pros and cons of coming back home.

"Up until today I never thought about it."

Mr Dias agrees: "Salaries outside Portugal will always be higher, and all those who don't have any personal or familial connections to the country won't have any kind of financial or career incentive to stay there".

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