Austria: Austrian Industry Denounces 'Counterproductive' Tax Debates
14 August 2013
Posted by: Author: Ulrika Lomas
Author: Ulrika Lomas
President of the Federation of Austrian Industries (IV) Georg Kapsch has lamented as "counterproductive" the ongoing debate on new or higher taxes in Austria in the run up to the elections, warning that the discussions are proving highly damaging to Austria as a location
The idea that wealth taxes will solve the budgetary problems of the state, and will then serve to create new jobs in Austria, is "simply wrong," Kapsch insisted.
Alluding to the fact that the tax burden in Austria of 42.2 percent is already significantly higher than the European Union (EU) average of 39.1 percent, and highlighting the high additional labor costs burdening businesses, Kapsch emphasized that Austria has become less competitive over the course of the past few years, as reflected in successive international rankings. Maintaining that Austria should look to its neighboring countries, where there is a much more business-friendly environment, Kapsch made clear that Austria can no longer rest on the laurels of the past, namely times when the country was dubbed "the better Germany."
According to the Austrian industry representative, it is imperative to create jobs in Austria, to ensure the future financing of the welfare state. Rather than constantly slamming those who create jobs, it is therefore vital to encourage entrepreneurs and attract foreign investment, and not to increase the fiscal burden on individuals and corporations, especially given the difficult economic climate, Kapsch said. Implementing structural reforms and prudent expenditure cuts must take precedence over new taxes in the next legislative period, he stressed.
Concluding, the IV president reiterated that further tax rises in Austria must be ruled out as they will merely drive businesses and international headquarters out of Austria. In contrast, structural reforms will increase efficiency and make Austria fit for the future, Kapsch noted, stating that if carried out correctly, this will raise the competitiveness of Austria as a location and create the financial scope for tax relief for all in the future.