ÖAustria introduces a special charge for the emission of climate-damaging CO2. The new tax is part of an “eco-social” tax reform of the conservative-green government, which Federal Chancellor Sebastian Kurz presented on Sunday at a press conference in Vienna. The CO2 tax will therefore be levied from July 1, 2022 and will initially amount to 30 euros per ton. This price is expected to rise to 55 euros by 2025.
In order to make the levy fairer, the government is planning a “climate bonus” of up to 200 euros annually, which will flow back to the taxpayer. The highest bonus rates are to be given to people in particularly sparsely populated rural areas because they are more dependent on cars.
Kurz highlighted further measures aimed at reducing the tax burden on working people. Accordingly, income tax and social security contributions are falling and there are higher tax breaks for families with children. Corporate tax is also expected to drop from 25 to 23 percent by 2025 in order to stimulate investment.
An environmentally friendly tax reform was one of the core elements of the coalition agreement between Kurz’s conservative ÖVP and the green junior partner. The Green Environment Minister Leonore Gewessler spoke of “long nights” in which the details were negotiated. Vice Chancellor Werner Kogler, also from the Greens, described the reform as “historic” because it brought with it a new way of thinking: environmentally friendly behavior will be financially rewarded in the future.
The environmental organization WWF, however, criticized the reforms as a “weak compromise”. “Much more ambitious” measures are needed to effectively reduce emissions. The CO2 price must be higher and environmentally harmful subsidies should be abolished. When asked about the fact that the CO2 price is lower than many experts have asked for, Kogler said that the principle is initially more important than the initial CO2 price.
.