UPDATE 1-Austria to cut corporate tax to 21 pct as part of fiscal overhaul
Published 7:16 AM ET Tue, 30 April 2019
Reuters
VIENNA, April 30 (Reuters) - Austria's right-wing government plans to cut taxes by more than previously announced, it said on Tuesday, outlining a package of measures that includes trimming the corporate tax rate to 21 percent from 25 percent by 2023.
The ruling coalition of conservatives and the far-right Freedom Party has made cutting income tax for low and middle earners a central priority. The small country's overall tax rate is slightly above the euro zone average of roughly 40 percent of gross domestic product, with a generous welfare state.
The total annual tax reduction will be 6.5 billion euros ($7.3 billion) by 2022, the next election year, relative to this year - roughly 2 billion euros more than previously announced. Most of those reductions will be in the form of income tax cuts.
But with quarterly GDP data on Tuesday underlining that past years' economic recovery is now on the wane, the government gave few details of how it plans to fund its plans beyond counting on solid future growth and reducing government spending. More details are due to be announced in the autumn budget.
"I have been in politics long enough to know that if I give you further details, the opposition will turn it around and use it for months to stoke fears and divide the country," Chancellor Sebastian Kurz told a news conference, adding that the government would act to increase the effective retirement age.
The package did not, however, include Kurz's campaign pledge to scrap corporate taxation of company profits that are re-invested rather than paid out. The government said that was partly because under European Union law those investments could also have been made outside Austria, which it did not want. ($1 = 0.8941 euros) (Reporting by Alexandra Schwarz-Goerlich and Francois Murphy; Editing by Alison Williams and Ed Osmond)
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