Revenue from the digital tax introduced in Austria in 2020 is bubbling. If 34 million euros were withdrawn in the first year, it will have been 80 million euros in 2021 and the Minister of Finance expects this year Magnus Bruner (ÖVP) already 100 million euros, as he said in an interview with the APA. “It was certainly the right decision to introduce this tax,” said the finance minister. And he hopes that there will be an agreement on this across Europe by the end of the year.
“The digital tax is a matter of justice.” Austria is a pioneer here, “our experts are in charge of negotiations for an international digital tax”. At the EU level, Brunner expects a decision to be taken soon by the end of the year so that the tax can come into effect as early as 2023. There was a blockade by Hungary and Poland, but Poland had already given in. The theme will continue to occupy Ecofin and “I am optimistic that the tax will come”.
Mid-terms in the US have influence
When it comes to introducing a global digital tax, a lot depends on the US. Midterm elections are held in the fall. Much depends on it, according to Brunner, who is “reluctant” to make predictions.
Back to strict budget rules
At the same time, the finance minister insists on a return to sound budgetary policy at EU level. Extraordinary times called for exceptions, “but for the monetary union to remain in place, we must return to sustainable budget policies and once again abide by strict budget rules.” This is not done on its own, but it is necessary to give the European Central Bank the necessary room for manoeuvre. Currently, it is not possible to react so quickly because the situation in each country is very different.
Focus on debt reduction
The ECB must refocus on its main task, price stability. “This is out of the ordinary.” Austria and Germany are the driving forces when it comes to finding credible paths again and moving forward with debt relief. “We have to urge the affected states to comply with debt rules again. But they don’t see the monetary union in jeopardy,” Brunner emphasized.
Relief packages more expensive than additional income from inflation
Brunner names “after 2023” as the time horizon. Exceptions have been extended to next year, but after that it should end. Austria’s budget is also strained by the two anti-inflation packages from the beginning of the year with four and the third package worth €28 billion. These are significantly greater than the additional revenue from rising prices. “The relief packages are larger than the additional tax revenue and will not finance themselves.”
The national debt is currently at 80% and is expected to drop to 74% by 2026. Maastricht’s forecast deficit is four percent this year and is expected to drop to one percent by 2026. The abolition of cold progressions from 2023, which alone represents 16 to 17 billion euros, is taken into account in these calculations, but not the brake on the price of electricity.