Targets and Options of Tax Reform: Reform Options for Indirect Taxes

Indirect taxes are an important part of the Austrian tax system. They help finance a large part of the state's responsibilities and they also create desirable economic and social effects. The study of reform options for indirect taxes discusses in particular options to increase specific consumer taxes. Such measures would have a controlling effect as well as provide some leeway to develop the tax structure towards a more employment-friendly system. Bringing taxes on tobacco, alcohol and beer to the average level of the EU 15 and re-introducing the tax on wine would generate total revenues of over € 0.5 billion which could be used for a comprehensive reform of tax rates. An increase of the general VAT rate, on the other hand, is not recommended.