Instead of the planned reduction in health insurance contributions, there will be a higher social insurance bonus. After the Council of Ministers, the government praised the measure that came about despite the corona pandemic.
The original plan to reduce the burden on low incomes by lowering health insurance contributions had been criticized by the social insurances. Now this goal is to be achieved via the existing social security bonus, which will be increased from 400 to a maximum of 650 euros per year. The tax deduction is increased for retirees.
The central focus of the tax reform remains the introduction of a CO2 tax. In return, a regionally staggered climate bonus is paid out. With the reduction in wage tax, a mixed tax rate is now provided from the beginning of the year instead of several levels. The total relief from the reform by 2025 should amount to 18 billion euros. 3.8 million people who pay wage tax will benefit, as Federal Chancellor Karl Nehammer (ÖVP) said after the government meeting.
“The environment will benefit massively from this major reform,” emphasized Nehammer. At the same time, a relief for the people is achieved. Vice Chancellor Werner Kogler (Greens) spoke of the “greatest transformation of the tax system in the Second Republic”. This tax reform will have positive effects both ecologically and economically. Finance Minister Magnus Brunner (ÖVP) also described the measures as a bridge between ecology and economy.
