The Portuguese government plans to slash taxes for young people to discourage locals from leaving and attract skilled foreign workers.
The centre-right government of Luís Montenegro plans to scrap a proposed 15 percent cap on income tax for people between 18 and 35 and replace it with a progressive scheme. Under the proposal, young people earning up to €28,000 ($30,000) a year would be completely exempted from the tax in the first year of work.
The tax burden would then gradually increase over ten years. People would be exempted from 75 percent of the tax from the second to the fourth year, by half between the fifth and the seventh and 25 percent from the eighth to the 10th year.
According to the government, the measures could help up to 400,000 young people struggling with rising costs and dissuade them from emigrating to other countries. The tax relief would also apply to foreign workers.
In recent years, Portugal has already become an attractive destination for foreigners fleeing expensive rents and cold weather and, should the measures be passed, become even more so.
The vote on the budget takes place on 31 October.