As part of an overhaul of its taxation regime, Austria will implement a carbon levy of 30 euros per tonne said government officials while adding, the move is aimed at rewarding behaviour that helps protect the environment while cutting corporate and income taxes.
Chancellor Sebastian Kurz, whose conservatives govern in coalition with the Greens, called the package which will provide a cumulative $21 billion (18 billion euros) of tax cuts through 2025 marking the country’s biggest tax overhaul in modern Austrian history.
The carbon levy will start in mid-2022 and rise to 55 euros per tonne in 2025.
In order to cushion the blow on consumers, the government said it provide 100 euros per year for urban dwellers and up to 200 euros for people who live in the countryside where public transport is less available; the move is part of its “climate bonuses” package.
“Less pollution in the air, more money in the wallet,” said Greens leader Werner Kogler.
He went on to add, corporate tax rates will fall to 23% in 2024, down from the current 25%, while income tax rates for people in two income brackets will also drop.
Family “bonus” allowances will rise to 2,000 euros per child from mid-2022 from the current 1,500 euros, while health insurance contributions for people on lower incomes will decline.
In a statement Finance Minister Gernot Bluemel said, “Economic and jobs growth fostered by the package would help pay for the tax cuts and that Austria’s debt to GDP ratio would fall step by step over the years”.
($1 = 0.8625 euros)