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Austria: Tax Losses Amount to € 2bn in 2014

Published: November 29, 2013; 09:14 · (Vindobona)

The Austrian People’s Party estimates tax losses in the amount of € 2bn for the coming fiscal year as announced by State Secretary for Foreign Affairs Reinhold Lopatka in an interview with radio station Ö1.

Austria: Tax Losses Amount to € 2bn in 2014 / Picture: © Flickr / The Austrian Foreign Ministry

The financial transaction tax, which was urgently craved by the Austrian government, will not be introduced in 2014 already. However, according to State Secretary Lopatka this is not the only bad news since the low interest rates have a negative impact on the capital gains tax where losses will amount to € 500m. Furthermore, there will be losses in the same amount in revenues from corporate and income tax. Moreover, the tax on oil will decrease by € 200m because of the high prices. Only taxes on consumption and wages are in line with the Finance Ministry’s estimates.

According to current estimates there will be a shortfall of almost € 2bn. However, State Secretary for Finances Andreas Schieder points out some positive developments: For instance, the Austrian state would pay less for loans taken out than planned.

As a result of the budget shortfall the fiscal situation is expected to remain tense. In the next years, further austerity measures are much more likely than tax cuts.

President of the Austrian Chamber of Commerce (WKO) Christoph Leitl calls for growth stimulating measures which are the basis for the consolidation of the Austrian budget. Leitl calls for budget-friendly yet effective and growth stimulating measures like accelerated tax depreciation, a higher exemption amount for low-value assets or bonuses for craftsmen. Simultaneously the public authorities had to save one percent in expenses annually in the coming five years. “We need to exit the government debt policy. By this we need growth stimulating measures because without growth there will not be any budget consolidation and not sufficiently more employment,” Leitl claimed, adding that “those who do not invest cannot expect any yields.”