Tax reform eases the burden on domestic agriculture

Photo: BML / Alexander Haiden

The Federal Government is now getting the most comprehensive relief package of the Second Republic off the ground. The eco-social tax reform with a total volume of 18 billion euros includes numerous measures to reduce the burden on our farmers.

In a European comparison, agriculture and forestry are presently bearing a higher tax burden in Austria than in other countries. Moreover, most EU Member States grant a compensation for the mineral oil tax or a preferential tax treatment for agrodiesel. For lack of technical alternatives, a complete exit from fossil fuels will not be possible in agriculture in the near future, especially not in tractors and machinery. With the introduction of a tax remuneration for agrodiesel, farmers are fully compensated for the costs arising for them due to the introduction of the CO2 pricing.

The defined goal of the government is a complete switch of electricity generation from non-renewable to renewable production by 2030. An important contribution to the achievement of this goal will be made by photovoltaic systems. In agriculture, we want to maximise the number of energy-autarkic farms which generate the electricity they need from building-integrated and operation-integrated photovoltaic systems with storage facilities. For this purpose, a special investment fund for agriculture with a volume of 25 million euros annually will be available.

Regional climate bonus especially for rural areas

The regional climate bonus is to reduce the burden on people who, due to their place of living, depend more strongly on a car than people in agglomerations with good access to public transport. The bonus will be available as from 2022 and will be granted in four steps: Depending on where in Austria a person has his/her principal residence, in an urban or in a rural municipality, it will amount to 100 euros, 133 euros, 167 euros, or 200 euros. For each child, the bonus is granted in the amount of 50 percent. The amount may change dynamically, depending on the income from the national emissions trade.

Clean heating

Austria wants to phase out the use of the fossil fuels oil and gas for heating systems. Agricultural holdings, too, still use heating systems that burn oil or gas. A total amount of 500 million euros will be provided for various measures serving the switch to renewable energy sources, like biomass or pellets, for heating.  In the medium and long term agriculture and forestry will, as raw material providers, particularly benefit of these measures.

  • Get out of oil and gas: 180 million euros
  • Tax incentives for exchange and renovation of boilers: 180 million euros
  • Exchange of boilers for those on low incomes: 80 million euros
  • Support package for thermal rehabilitation in multi-storey residential buildings: 60 million euros

Other measures of relevance to agriculture

  • Reduction of health insurance contributions especially for modest incomes by 1.7 percent including compensation of the revenue shortfalls for the health insurance as from 1 July 2022.
  • Exemption from the electricity charge for self-generated electricity produced from renewables
  • Investment allowance including greening component (totally 350 million euros; orientation towards investment premium)

Regional pricing for foods

Foods which travel widely cause higher CO2 emissions and are often harvested before they are ripe or not produced freshly. With a distance-related pricing system, the environmental stress in the food sector is to be reduced and the sustainability of the sector is to be enhanced. Last, but not least, this will also improve the equality of opportunities for regional agriculture and create greater proximity to customers. The focus is to be on freshness and top product quality.