Austria's Pröll Mulls Water Tax

by Ulrika Lomas, Tax-News.com, Brussels

25 August 2010

According to the Lower Austrian People’s Party (ÖVP), the government has recently been considering the idea of introducing a water tax in Austria. The Austrian finance ministry has, however, denied the reports, referring to a “misunderstanding”.

The basis for the latest speculation and cause for concern is reportedly a letter from Lower Austria’s Deputy Governor Wolfgang Sobotka to the country’s Finance Minister Josef Pröll (ÖVP).

Writing on behalf of all the federal states in Austria, and alluding to the proposed water tax by way of an example, Sobotka urged the government to be aware of the need to distribute any new revenues between the local authorities in accordance with existing formulae. Ultimately, the introduction of any additional revenue measures, such as the proposed water levy, requires the close agreement of the federal states concerned, the letter states.

Commenting on the issue, a spokesman for Sobotka noted that the idea of the water levy was indeed put forward by the government. The hope is, the spokesman added, that these plans do not materialize, particularly given the fact that the federal states would reject such a tax. Fiercely dismissing claims that a water tax is currently under consideration, the finance ministry emphasized that such a proposal has never been tabled.

The exchange of letters followed an invitation from the finance ministry to the states inviting them to attend individual talks to discuss state contributions to budgetary consolidation. Lower Austria, which currently holds the presidency of the provincial conference, nevertheless ruled out such a suggestion. Alluding to the country’s stability pact, an agreement between the government, the nine federal states, towns and municipalities, Sobotka underlined the fact that any negotiations should be conducted jointly.

Recommended