Following the Wöginger trial

How the Austrian Tax Office Moved to Linz

The Austrian Tax Office is headquartered in Linz.(Bild: Pressefoto Scharinger/Daniel Scharinger)

The Wöginger trial also draws attention to the creation of the Austrian Tax Authority. This is because the man who later became its head had himself been involved in the very reform that made the new central authority, based in Linz, possible in the first place.

The trial against former ÖVP parliamentary group leader August Wöginger continues to have far-reaching political repercussions. Also charged was the suspended head of the Austrian Tax Office, Siegfried Manhal. Both were convicted in the first instance on Monday, though the verdict is not yet final.

A Reform as a Major Achievement
The investigation into the affair is no longer solely about potential political patronage and interventions in the staffing of the Braunau Tax Office in 2016. The case also sheds new light on the 2021 reform of the entire tax administration, which then-Finance Minister Gernot Blümel presented as a major coup. This reform was initiated and driven starting in 2018 by Secretary General Thomas Schmid, who moved to the state holding company ÖBAG as a board member in 2019.

Thomas Schmid at the trial of the now-resigned club chairman August Wöginger(Bild: APA/FOTOKERSCHI.AT)

The reform also consolidated the previously regional tax offices into a new central authority: the Austrian Tax Office. Since the reform’s implementation in 2021, its headquarters have been located in Linz. Siegfried Manhal was appointed director.

,Head of the Modernization TeamOne thing in particular is now explosive: According to “Krone” investigations, Manhal was the head of the very modernization team responsible for the far-reaching changes at the tax offices. Thus, the man who was set to rise to the top of the new authority upon implementation was the very one who determined the outcomes. This is not an unfamiliar pattern in Austria: reform groups are often staffed with people considered politically reliable. Apparently, this is also a career-boosting trait.

Is the finance minister turning the tax office into a traveling circus because of the ÖVP?

Die NEOS in einer parlamentarischen Anfrage zum Standortwechsel

Close ties to the ÖVP
In the case of the tax administration reform, this ultimately led to changes in the Federal Tax Code and the creation of a central tax office headquartered in Linz by order of the finance minister. The fact that Manhal is from Upper Austria and is married to a long-time ÖVP state parliamentarian from Upper Austria now intensifies the political questions surrounding the thoroughly surprising decision on the location. Even during the implementation phase, NEOS lawmakers had asked critically in a parliamentary inquiry: “Is the Minister of Finance sending the tax office on a traveling circus because of the ÖVP?” And the SPÖ questioned—also in a parliamentary inquiry—how the appointment of Manhal, a native of Upper Austria, had come about. Blümel stated that Manhal had been the “most suitable” of six applicants.

:An Agency with 7,000 EmployeesIn any case, the new structure has led to a significant centralization of responsibility. Today, around 7,000 employees at the Austrian Tax Office report to a single leadership. Previously, regional tax offices were organized more independently. Directors in cities like Graz or Linz were responsible for hundreds of thousands of taxpayers in their regions. While these levels still exist, they now exist only in the form of office management. Decision-making authority has thus been concentrated in a single location in Linz.

Critics see this as a problem. The more power is concentrated, the more direct political influence can be exerted. A central authority is easier to control, but also more susceptible to political influence than decentralized structures in the federal states.

Siegfried Manhal is not currently in charge of his agency. He was suspended a year ago.