Austria's Leitl Warns Against Tax Rises

by Ulrika Lomas, Tax-News.com, Brussels

09 November 2009

President of the Austrian Federal Economic Chamber (WKÖ), Dr Christoph Leitl, has categorically ruled out the idea of either raising existing taxes or introducing new taxes in Austria as a means of consolidating the budget.

Despite the country’s predicted record budget deficit, due to the effects of the prevailing economic crisis, Leitl is convinced that reform of the country’s administration system could save the government billions of euros every year.

Significant savings could, he has maintained, be made simply by reducing bureaucracy in the state administration, by reallocating resources within the health sector, and by cutting costs in education.

Although Leitl rejected the idea of any future rises in tax or additional levies in Austria, he has nevertheless stated that he remains open to the introduction of an international tax on financial transactions.

Highly critical of Leitl’s remarks, President of the Austrian Federation of Trade Unions, Erich Foglar called for an urgent debate on taxation, with a particular focus on the issue of wealth-related taxes.

According to Foglar, given that there is still a clear imbalance in Austria, the topic of a wealth tax should not be discussed merely at European level.

Citing Organisation for Economic Cooperation and Development figures, Foglar noted that the introduction of wealth-related contributions would constitute only 1.4% of all tax revenue.

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