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Austria slashes taxes in biggest post-war fiscal reform

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Austria
Europe   The reforms would come into force in 2016

Austria's government agreed to slash personal income taxes by 5 billion euros, as part of what it described as the biggest post-war fiscal reforms in the country.

The reforms would come into force in 2016, with the tax rate on the first tranche of taxable wages to be drastically cut from 36.5 percent to 25 percent.

Each taxpayer is expected to be levied an average of 1,000 euros less a year. Tax rates on capital gains and non-wage income would however remain unchanged.

"This is the most significant fiscal reform" since 1945, Chancellor Werner Faymann said.

Austria will turn to consumers and retailers to finance the reforms, with the lowest rate imposed on goods and services to be raised from 10 to 13 percent.

The government also expects to claw back some 1.9 billion euros in lost taxes through tighter checks on cash transactions.

In addition, some tax perks including those on company cars would be scrapped, a move expected to lead to 900 million euros in levies.


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