The Tax Reform 2009-10

The tax reform 2009-10 compensates for fiscal drag and makes an important contribution towards combating the current economic crisis. It also includes elements for a better reconciliation of work and family obligations. Other essential economic goals will, however, not be achieved. Neither will the tax system become more environmentally friendly nor will the tax code become simpler. Also, the new measures provide little incentive for economic growth and job creation, with barriers to more mini- and part-time jobs remaining high. No major effort has been made to exonerate labour earnings from social contributions or to shift social security financing from earmarked payroll taxes towards general tax revenues.