Austria plans to introduce CO2 tax by 2022

The tax will be increased gradually over time to allow the economy to adjust to the new measures and create incentives to switch to carbon-neutral systems, the finance minister explained. [Shutterstock/DesignRage]

Austria’s ÖVP-Green coalition is currently “working flat out” on a new eco-tax-reform that will pave the way for taxing CO2, Finance Minister Gernot Blümel told a plenary session in parliament, announcing the government’s plan to introduce a CO2 tax that will take effect in 2022.

The tax will be increased gradually over time to allow the economy to adjust to the new measures and create incentives to switch to carbon-neutral systems, the finance minister explained on Tuesday.

To not put additional financial burdens on the pandemic-stricken economy, Blümel also announced tax cuts for small and middle-income households as well as the industry.

But Blümel also stressed that the green transition will only be successful in Europe if the finance sector is on board, noting that “we need private investors”. The government is unable to make all the necessary investments and should only provide seed capital, the minister added.

The move comes as various experts have already called on the government to introduce a CO2 tax. The IMF has recently said that a CO2 tax would greatly benefit the Austrian economy and its transition towards carbon neutrality. (Oliver Noyan | EURACTIV.de)

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