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Austria's OGB Demands Tax Relief For Workers

by Ulrika Lomas,, Brussels

04 November 2013

President of the Austrian Federation of Trade Unions (ÖGB) Erich Foglar has underlined the need for the new coalition Government to reduce the tax burden on employees, to ensure that workers have more net income from gross pay in future.

Highlighting the importance of a structural reform of taxation in Austria, to lower the burden on labor, Foglar warned that the 36 percent entry rate of tax currently imposed on annual income in excess of EUR11,000 (USD15,071) is a "serious imbalance" in the tax system.

Alluding to the fact that wages in Austria are currently subject to very high levels of taxation, while very little tax is imposed on wealth, the federation advocated that plans to introduce tax relief for low-income earners should be financed by a greater taxation of large wealth and inheritances. The ÖGB nevertheless ruled out the idea of abolishing tax breaks, most notably the income tax break accorded for Christmas and holiday bonuses. These thirteenth and fourteenth month salaries are currently taxed at a flat rate of just 6 percent.

Furthermore, the ÖGB emphasized the importance of reducing payroll costs, while stressing that health and accident insurance contributions must not be lowered, as advocated by the Austrian People's Party (ÖVP).

Although the ÖGB's demands very much reflect the tax stance of Chancellor Werner Faymann's Social Democrat (SPÖ) party, the ÖVP made quite clear ahead of coalition talks that it will not contemplate the idea of introducing new taxes in Austria or raising existing levies.

TAGS: tax | insurance | employees | payroll | tax rates | Austria | tax breaks | tax reform | Trade Union | individual income tax

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