IMF warns of “considerable loss of revenue” implicit in IRS Jovem

The government’s plan to reduce income tax for the under-35s comes into effect next year, and will see young people paying a maximum tax of just 15% on income. The measure implies “considerable loss of tax revenue” (under-35s will end paying a ⅓ of the tax they would normally pay) – but the government believes it is needed to dissuade young people from emigrating (for ‘a better life’). The International Monetary Fund however is not so sure. It has warned in a report published yesterday that “it is uncertain” that IRS Jovem will stop the brain drain, while, in the IMF’s perspective, the government’s main focus should be on ensuring a budget surplus (not tax reductions…).