
Austrian Chancellor Karl Nehammer has vowed to cut taxes for both lower-paid workers and higher earners, as his People’s Party (ÖVP) seeks to gather support ahead of the parliamentary elections on 29 September.
The ÖVP, currently the senior partner in a coalition government with the Green Party, is polling in second place, trailing well behind the right-wing Freedom Party (FPÖ).
Speaking at a press conference on Monday, Nehammer unveiled plans to reduce the basic tax rate from 20% to 15%.
At present, annual incomes of up to €20,818 are taxed at 20%, with the rate increasing progressively for higher earners. Incomes of up to €12,816 are currently tax-free.
Nehammer also pledged to abolish the second-highest tax bracket of 48% and to make overtime pay entirely tax-free, claiming that this would provide relief for “the broad middle of society.”
Further incentives will be introduced to encourage pensioners to remain in the workforce. At the same press event, the head of the Austrian Federal Economic Chamber (WKO), Harald Mahrer, announced that working pensioners would be exempt from income taxes and contributions.
The ÖVP also aims to attract new businesses to Austria through a tax incentive scheme known as the Location Promotion Act, ensuring that the country’s corporate tax rate remains 0.5% below the European average.
The opposition was quick to voice criticism of the proposed measures.
Klaus Seltenheim, Federal Secretary of the Social Democratic Party (SPÖ), described the plans as “billion-euro gifts” for large corporations and the wealthy, adding that the economic strategies of the ÖVP and FPÖ were “identical.” NEOS MP Josef Schellhorn labelled the proposals “completely unbelievable,” arguing that the ÖVP had plenty of time to implement reforms but had failed to do so, and would once again fall short of its promises.