Portugal's parliament on Thursday approved a budget plan that includes tax breaks for returning emigrants in a bid to lure back those who left during the global financial crisis that hit the country hard. The expansionary 2019 budget, backed by a left-wing majority in parliament, also aims to boost the purchasing power of households while cutting the already low deficit even further.
Returning emigrants will be allowed to declare only half their taxable income for five years if they return, provided they lived abroad for at least three years. The "Return Programme" is to run for the next two years. Around 500,000 residents left Portugal between 2010 and 2015 in the wake of the global financial crisis.
Although some 350,000 have since returned, Lisbon wants to tempt the rest to come home as well as Portugal struggles with a low birth rate and an ageing population. According to projections by the national statistics office, Portugal's population will fall to 7.7 million by 2080 from 10.3 million now.
Overall, Portugal's budget includes cuts in income tax, fewer restrictions on civil servant pay and a boost for the lowest pensions. At the same time, the eurozone member's public deficit is projected to reach its lowest level since the 1974 return to democracy at 0.2 percent of GDP, after 0.7 percent this year.
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