Blümel: Austrian economy and Austrian businesses in a positive mood - instalment payment model proving its worth Economy now 1.3% bigger than at pre-crisis level according to WIFO; 32,000 businesses have applied for tax payment deferrals through the COVID-19 instalment payment model
“The positive momentum of recent months is ongoing. All sectors have recovered strongly as a result of the steps to reopen the economy. Currently Austria’s economy is 1.3 per cent bigger than it was prior to the crisis; and 5.1 per cent bigger than it was in the same week last year. The figures are consistent with the expectations of economic commentators and with the more upbeat mood coming from all sectors, in particular construction and industry but also tourism,” said Finance Minister Gernot Blümel, commenting on the latest WIFO Business Cycle Survey. The results of the WIFO (Austrian Institute for Economic Research) survey, which takes a regular snapshot of the mood and expectations of businesses, stood at the continuingly high level of +22 points. Following the quick recovery experienced by the construction sector and by industry, the data is now showing a more upbeat mood in the service sector as well. “The measures we have taken are facilitating a swift economic recovery. At the same time we continue to help the most seriously affected sectors, such as tour operators, the night-time gastronomy sector and city hotels, and offer measures to help them with liquidity.”
The payment relief measures offered by the tax administration, in particular, have been taken up by businesses in their numbers since the start of the pandemic. In total, the tax authorities have deferred or reduced payments amounting to some EUR 5.6 billion. As a result of the rapid economic recovery in the second quarter of 2021, the deferrals ceased at the end of June. In order to provide a cushion for the hardest-hit businesses, the COVID-19 instalment payment model was introduced. Businesses can avail themselves of a model that has been specially developed to allow them a repayment period for the amounts they owe until the end of June 2024 at the latest. “Some 32,000 businesses have applied to participate in the COVID-19 instalment payment model. According to current estimates by economic researchers, this equates exactly to the 10 per cent of businesses that have experienced, and continue to experience, severe liquidity problems as a result of the COVID-19 economic crisis,” said Blümel.
Of the EUR 2.2 billion that will be processed through instalment payment and other payment relief models, some EUR 1.7 bn will go through the COVID-19 instalment payment model. “With this measure, we have found an accommodating solution for all taxpayers, businesses and individuals who have been affected,” stated Finance Minister Blümel.
With regard to the amounts owing by taxpayers on the day that the instalment payment model was approved, this reflects the structure of Austrian industry on a smaller scale: over 30 per cent of instalment payment applications were for sums between 500 and 5,000 euros; over 20 per cent of instalment payment applications relate to sums between 10,000 and 30,000 euros; and just over 10 per cent of taxpayers are paying back a sum of 50,000 euros in instalments.