On land, labor, etc.

OECD recommends a different tax system for Austria

The OECD recommends, among other things, a higher property tax and lower national debt for Austria (symbolic image).(Bild: ©magele-picture - stock.adobe.com)

The Organization for Economic Cooperation and Development (OECD) presented Austria's government with a number of reform proposals on Monday. These include a different tax system and lower public debt. However, the OECD's assessment of the economic and social situation is generally positive.

The economy has "developed well over the last two decades", said OECD Secretary-General Mathias Cormann at a press conference in Vienna on Monday. The standard of living in Austria is higher than in most OECD countries and income inequality is relatively low, as there are public transfer payments. Nevertheless, inflation is currently high despite the decline in inflation.

OECD Secretary-General Mathias Cormann(Bild: APA/Jakob Langwieser)

Low taxes on real estate, high taxes on labor
The organization of industrialized nations sees a need for change in the tax system. In Austria, real estate is taxed "at a low level", while the tax burden on labor is high. In their 140-page report, the experts therefore recommend shifting the taxation of labor "to other bases", including higher_CO2 and property taxes. Property values should be updated regularly. Another suggestion: relax the strict entry requirements for certain professional services.

From left: Economics Minister Martin Kocher, Finance Minister Magnus Brunner, Mathias Cormann (OECD) and Environment Minister Leonore Gewessler at a press conference on Monday(Bild: APA/Helmut Fohringer)

The organization is also concerned about Austria's "relatively high" national debt. It recommends introducing a medium-term plan to reduce the deficit and debt. In addition, the pension system should be secured, for example by linking the retirement age to the life expectancy of the population.

More incentive for paternity leave
There is also a need for reform in the areas of climate, health, education and childcare. The report states that women's participation in the workforce is restricted by "the inadequate supply of high-quality childcare". Stronger incentives for paternity leave could also lead to a more balanced division of time with children between mothers and fathers.

The OECD's recommendations would be taken "very seriously", said Economics Minister Martin Kocher (ÖVP), adding that the country report offered a "fresh look" at Austria.