A manifesto signed by 59 people, including managers and former government officials, argues that the rationale presented for the end of the tax regime for non-habitual residents (NHR) provided for in the State Budget for 2024 (OE2024) was not “proven”.
In the document, it is recalled that “in recent years Portugal managed to attract relevant foreign investment” and that “this was only possible thanks to the growing capital of trust in the Portuguese economy”, giving an example of investments such as “the CALB electric battery factory or the SK Hynix semiconductor project.”
According to the document, “this positive context requires a considered analysis of all effective instruments to attract foreign capital, generating highly qualified employment”, highlighting that the non-habitual resident regime is part of “a fiscal strategy based on current paradigms of competitiveness global".
“So why end the NHR and close its doors when the numbers prove the success of this strategy?”, they asked.
The manifesto highlighted that “the stock of foreign direct investment (FDI) reached record levels this year”, adding that this “investment is an oxygen balloon” for the economy.
“The NHR opens the door to more FDI and foreign companies that play an important role in our economy: they pay higher salaries, employ more women in management and hire more qualified workers”, he highlighted.
“Surprise”
According to the document, “by attracting qualified human resources to our companies, the NHR combats the shortage of qualified management staff and the low productivity rate”. Thus, “the announcement of the end of the NHR caused surprise and concern among economic agents”, they indicated.
“In the absence of a public and credible study that justifies it, what is the rationale for this decision”, they questioned, ensuring that “at no time has it been proven that NHR has exhausted its usefulness”.
“Without the NHR, Portugal risks losing the only instrument capable of rescuing the qualified Portuguese who had to leave the country, at a time when around 48% of Portuguese people with higher education emigrated”, they assured, highlighting that “without instruments like the NHR, Portugal allows other countries to profit from our large investment in education”.
“The State Budget proposal is being discussed in the specialty and we look forward to the maintenance of all instruments essential to the competitiveness of the economy”, they indicated.
“It is urgent to adjust the NHR to the real needs, present and future, of our economy, maintaining this important pillar in capturing external value“, they appealed, highlighting that “otherwise” Portugal will lose “more FDI, foreign companies and human talent for 26 European economies that wisely maintain fiscal instruments like the NHR”.
Among the 59 subscribers are Vasco de Mello, Rui Miguel Nabeiro, Pedro Carvalho, executive president (CEO) of Tranquilidade/Generalli, Gonçalo Conceição, CEO of Viúva Lamego, João Moreira Rato and the former secretaries of State for Fiscal Affairs Carlos Lobo and Paulo Nuncio.
This is 100% correct. All this change in the law did was end billions of investment in Portugal over the next years. Pensioners and retirees are taking up the inexpensive housing, not GV or NHR buyers, who buy $500K or above homes.
This was a horribly dumb, virtue signaling move by the government meant to appease Portuguese who do not understand the economics involved.
This will highly damage Portugal, period.
By Mark Dahlgren from Algarve on 14 Nov 2023, 19:00
We are retired here.. invested over 600 k in a house… 250 k euros in renovation by Portuguese companies… Portuguese gardeners etc.. travelling back and forward to ‘old home’… visitors (friends ) come visit us from all over the world with TAP… so ?This was a very BAD decision for Portugal and competition with Spain, Greece etc.. ;(
By Pierre from Algarve on 15 Nov 2023, 18:18
A needed voice of reason within PT to combat stupid PS virtue signaling that was based on populist envy. The national heritage is to embrace and engage foreigners for the benefit of the country. Don't lose that sensibility now.
By Brian Sanders from Other on 15 Nov 2023, 20:00
Excellent viewpoint. I had done an analysis based on what, as pensioners, had contributed to the economy by the VAT we have paid in comparison to the tax savings we have received from the NHR and it was basically neutral, but the fact that we intend to stay here beyond NHR makes it a positive for the economy. Looking at it from the investment attracted and the jobs created for locals puts the NHR into a totally more positive aspect. I sympathize with the Portuguese people who see the NHR as an unfair advantage given to the extrangeiros, but the government should really put the effort into telling the people the advantages they are receiving from the program.
By Greg Shill from Algarve on 17 Nov 2023, 18:00
I don’t know where this Government or one of the respondents here get their information from but the Algarve is full especially in the off season (which is relevant) of wealthy retired people financing growth and jobs whilst living in homes ALL of which are above the purchasing power of 90% of locals. If this isn’t promoting productivity I don’t know what is !! I suspect the retired numbers in homes above e500 is above 50,000 ! Many more are investigating this and it could drive a significant part the economy as is happening in Asia. Health in later life being a major investment area.
By Chris Loynes from Algarve on 18 Nov 2023, 14:05