Austria may need opposition support for tax cut plan

Written By Unknown on Senin, 16 Maret 2015 | 18.12

VIENNA, March 16 Mon Mar 16, 2015 5:48am EDT

VIENNA, March 16 (Reuters) - Austria's government will likely need opposition support to pass parts of a 5 billion euro ($5.3 billion) tax-relief package to spur the economy, Finance Minister Hans Joerg Schelling said, a development that could complicate efforts to get it through.

Parts of the plan would probably need a change to the constitution, he told ORF radio in an interview broadcast on Monday, requiring a two-thirds majority vote that would force the ruling coalition to get backing from the opposition Freedom Party or Greens.

The leaders of both those parties told ORF their support for the reforms, due to take effect next year, would come with strings attached.

Far-right Freedom Party leader Heinz-Christian Strache said he wanted more savings from cutting administration costs, while Greens leader Eva Glawischnig highlighted the need for a more ecological approach to state finances.

Both said they had not yet been contacted by the government.

"I think in connection with tax reform there will be some constitutional provisions that we will have to make, also as a consequence of some other things such as the automatic exchange of (tax) data that we have agreed with the EU," Schelling said.

The governing Social Democrats and conservative People's Party agreed last week after months of talks to cut income tax rates for nearly all except those earning more than 1 million euros a year, whose top tax rate rises to 55 percent.

The plan calls for raising nearly 2 billion euros in revenue by fighting tax fraud -- in part by requiring shops to enter all transactions into cash registers and give receipts -- and raises VAT rates on some items including hotel stays, theatre tickets and pet food.

Schelling told ORF that constitutional law experts were still reviewing whether the legislation could, as envisaged, raise capital gains tax on dividends without changing it on other forms of investment income.

If not, parliament would have to amend the constitution, he said.

($1 = 0.9495 euros) (Reporting by Michael Shields; Editing by Andrew Heavens)

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