AK calls for cooperation tax hike

Labour Chamber (AK) President Herbert Tumpel has demanded higher corporation taxes.

Tumpel said yesterday (Thurs) Austrian firms had handed over just 17 per cent in taxes in 2010 despite the mandatory 25 per cent taxation rate. He explained the investigated enterprises used various loopholes to evade worse tax burdens.

The AK investigated the performance of 1,000 major and middle-sized firms between 2005 and 2010. Tumpel claimed most of them managed the crisis of 2009 remarkably well. He said workers were disadvantaged compared to their employers when it came to paying taxes.

“The effective tax contribution of Austrian companies has reached an absolute low,” the AK boss said. Tumpel appealed to the government coalition of Social Democrats (SPÖ) and the People’s Party (ÖVP) to keep firms from using loopholes. He also said the AK decided to campaign in favour of an increase in corporation tax by three per cent to 28 per cent. Such a reform would help the state to additional earnings of 100 to 400 million Euros, according to Tumpel.

The Economy Chamber (WKO) branded Tumpel’s suggestions as a threat to small and medium-sized enterprises. A spokeswoman for the chamber made aware of a recent statement by WKO chief Christoph Leitl. The ÖVP board member claimed Austria could manage to get rid of its budget deficit in one step if the state, its provinces and towns reduced their annual spending by five per cent.

The annual budget deficit rose during the crisis to 4.6 per cent in 2010 before it edged down by 0.7 per cent the following year. The government said in November it wanted to lower the deficit to 0.35 per cent in 2017 to fulfil the European Union’s (EU) budget criteria three years later. A constitutional debt brake should ensure that future coalitions would not leave the stricter austerity path, the current government’s leaders explained. SPÖ and ÖVP are currently fighting for the support of the opposition to achieve a two-third majority in parliament for its plan.

Tumpel’s criticism of the current tax system for businesses comes shortly after the Austrian Audit Office (RH) revealed that bosses of public companies earned 19.6 per cent more in 2010 than in 2007 while staff’s incomes rose by only 10.4 per cent. The RH said electricity provider Verbund AG, which is based in Vienna, topped the salary ranking of executive board members in 2010. Each Verbund board member was paid 842,000 Euros before taxes, according to the RH which called for more income transparency.

Post AG came second in the salary chart of firms in which the Republic of Austria holds a stake of 50 per cent or more since executive board members of the postal services provider earned 670,000 Euros a year. The RH is headed by Josef Moser. Apart from its wage examinations, the institution found that just 15 per cent of executive board members were women in 2010. The RH said this was an increase of only 3.8 per cent compared to 2007.