top of page

Government backpedals on key migration policies

On Thursday, the Finance Minister told the FT that Portugal will reintroduce tax breaks for skilled foreigners. However, it turns out that it's nothing more than the regulation of a current regime.

On Thursday morning, the Financial Times published an interview with the Portuguese Finance Minister, Joaquim Miranda Sarmento, announcing that Portugal will reintroduce the controversial non-habitual resident (NHR) tax regime for foreigners.

He presented it as one of the 60 measures in the package to boost the economy and said that the reintroduced regime would include the same 20% flat rate of income tax but only cover “salaries and professional income”.

“It will exclude dividends, capital gains and pensions, which was a problem between Portugal and countries like Finland or Sweden,” he said. The Minister also noted that the tax regime did not include any requirement to purchase property.

The Government made a big splash about the announcement on its social networks: X (formerly Twitter), Instagram and Facebook had publications with an identical title, accompanied by a quote attributed to Miranda Sarmento, that “the Government will ‘reintroduce the tax regime for non-habitual residents’”.

However, this was not what he said later in the day at a press conference:

“The previous Government, in the State Budget for 2024, created a rule in the Tax Benefits Statutes. We are going to regulate through an ordinance exclusively covering category A and B income”, Miranda Sarmento said.

In other words, the current regime already excludes pensioners and capital income, so the only change that will take place is an expansion of the range of eligible professions.

Despite the FT artile mentioning that the Minister was confident that the measure would pass in Parliament, at this Thursday's press conference the Minister of Finance declared that there was no need for a vote.

“The 20% IRS measure does not require approval in Parliament. It is foreseen, it just needs to be regulated. It was a rule that the previous government approved in OE 2024”, highlighted Miranda Sarmento.

To make matters worse, the publication on the Government portal and X (former Twitter) that spoke about this new regime were deleted.

The tax breaks were introduced in 2009 to aid Portugal’s recovery from the financial crisis then scrapped last year by the previous Socialist government. It called them a “fiscal injustice” that it blamed for driving up house prices in one of the Eurozone’s lowest-income economies.

More changes

According to Expresso, the Government is also considering backtracking on its position towards foreigners who are in an irregular situation but who are working and paying taxes.

Under the new Immigration Action Plan, which came into force at the beginning of June, immigrants who were working in the country but had not yet started the regularisation process with the Agency for Integration, Migration and Asylum (AIMA) were excluded from legalisation in Portugal.

However, the Minister for the Presidency now “intends to find a solution and has made himself available to regularise the scope of the exceptions in Parliament in dialogue with all the groups”.

This procedure could involve an exceptional regime or their inclusion in the transitional regime.

However, this dialogue isn’t expected to take place until after the summer.

Construction workers

In the meantime, the Deputy Minister for Territorial Cohesion announced on Thursday that, contrary to what was announced, the Government will now take specific measures to attract immigrant workers into the construction sector.

“Now, we need people who come to work, but I'm also telling you that the government is going to take very specific measures to speed up the entry into Portugal of people who are able to work immediately, particularly in the construction sector (...)," explains Manuel Castro Almeida, Deputy Minister for Territorial Cohesion.

He didn’t elaborate on the measures, but guaranteed that the Executive is working on addressing the issue.

It is worth recalling that the Minister had already warned about the lack of labour in the construction industry, which could jeopardise the implementation of the Recovery and Resilience Plan (PRR).

Validity extension

Last week, the Government had already approved the extension for one year of the validity of documents and visas for immigrants in national territory and created a mission structure for the recovery of pending processes. 

This mission structure will operate until 2 June 2025, and will have up to 300 people dedicated to functions related to both the administrative processing of cases and assistance to applicants".

In parliament, the President of AIMA, Luís Goes Pinheiro, expressed confidence that, in the summer of 2025, the pending issues will be resolved and that the authorities will only have to process current cases.

Posts recentes

Ver tudo


bottom of page