2023-09-27 15:07:00
As already announced, this will provide additional relief for low and middle incomes next year. With the expansion of tax incentives for overtime, tax incentives for overtime will also be created.
Finance Minister Magnus Brunner (ÖVP) spoke in the press foyer on Wednesday of a “service package” and used the resolution of the Progression Compensation Act to once once more praise the abolition of cold progression as “historic”. The measure also helped to maintain purchasing power in Austria despite high inflation. Of course, the funds will be missing from the budget in the coming years, but it is an “act of fairness,” said Brunner. The use of the variable third would also set important priorities for performance and combat the labor shortage and would also relieve the burden on families with children.
Video: Council of Ministers decides to abolish cold progression
The Green Club leader Sigrid Maurer emphasized the social component of the measures. With the “social third” resulting from the abolition of cold progression, the burden would clearly be relieved on low income groups. Increasing the additional child contribution to 700 euros is important in the fight once morest child poverty. ÖVP club boss August Wöginger was “particularly proud” of the expansion of tax relief for overtime, which many employees currently have to work due to the labor shortage. Performance must also be worthwhile in this country, says Wöginger.
Cold progression as a gradual tax increase in the area of wage and income tax was abolished at the beginning of the year. Since then, the tax brackets have been adjusted every year to reflect inflation so that taxpayers no longer slip into higher tax brackets as a result of annual wage increases. However, the adjustment of the tariff levels is only two-thirds automatic. The government has now decided on how the remaining additional income will be distributed next year.
Overtime should be rewarded
The variable third will amount to almost 1.2 billion euros in 2024. Around 800 million euros of this will be relieved on a staggered basis in the first four tax brackets and the deduction amounts will be increased. In order to reward overtime work, the monthly allowance is increased. The basic profit allowance for the self-employed is increasing. The allowances for dirt, hardship and hazard allowances as well as surcharges for Sunday, public holiday and night work will also be increased. In addition, the home office regulation for employees will be permanently extended. To ease the burden on families, the additional child allowance for low earners will be increased from 550 euros to 700 euros. The law is expected to be passed in parliament in November.
The Austrian Federation of Trade Unions (ÖGB) praised the adoption of the tax home office regulations into permanent law on Wednesday as a “first step”, but also called for the tax-free home office cost reimbursement to be valorized. “This is absolutely necessary, especially given the rise in prices,” said the ÖGB in the short message service X (formerly Twitter). The industrial association spoke of “positive signals for the numerous people in the country who are willing to perform and with a view to alleviating the shortage of skilled workers and skilled workers”. At the same time, IV General Secretary Christoph Neumayer called for “further steps for better performance” in a press release, such as incentives for continuing to work beyond the standard retirement age.
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