Finance Minister Blümel: 2021 to see reduction in base rate of income tax deducted at source
At government conclave in Krems, Blümel presents objectives and initial tax reform measures
Within the framework of a government conclave, Austrian Finance Minister Blümel has presented the government's objectives and approach with regard to implementation of tax reform. "In terms of fiscal policy, the Austrian federal government has set itself three major objectives: relieving the tax burden on taxpayers in Austria, ending deficit spending, and greening the tax system, with an incentive effect in the direction of greater environmental protection. This means that we shall be greatly easing the tax burden for working people and for Austria as a centre of business activity, our aim being to drive the tax ratio down towards 40% while reducing the debt ratio further towards the Maastricht target of 60% of GDP, while at the same time making the requisite investments aimed at climate protection," explained Finance Minister Blümel. Since this cannot all be achieved at once, an agreement has been reached with the experts at the Austrian Finance Ministry to adopt a step-by-step approach.
"We shall begin by cutting the base rate of income tax deducted at source from 25% to 20% as early as in 2021. This means tax relief totalling EUR 1.6 billion. In further stages, in 2022, the 35% rate will be reduced to 30%, and the 42% rate to 40%. Overall, this produces tax relief for Austria totalling EUR 4 billion," added Minister Blümel. Also planned for 2021 is an extension to the top rate of tax, tax relief for agriculture, and initial steps towards a greener tax system.
"Indeed, we need to work on developing the scope for such moves. We can do this through savings in the system, careful use of tax revenues and rigorous budget implementation. It is both good and right that we should count every euro carefully for the sake of the Austrian people," concluded Blümel.