Economic Committee: Hearing on a referendum on regional purchase

Proponents call for the strengthening of stationary retail

Vienna (PC) The Economic Committee discussed the “Kauf Regional” referendum today, which was backed by 146,295 signatures, as part of an expert hearing. The signatories demand that the unfavorable competitive situation of regional enterprises in comparison with “branchless” internet trade be compensated for by legal changes. Examples of this are a dedicated regional transfer fee for e-commerce or a value added tax reduction for stationary commerce. In addition to referendum representatives Eduard Egger and Andreas Palla, Gunter Mayr from the Ministry of Finance and Rainer Will and Patricia Grubmiller from the Austrian Trade Union were invited to provide information. All parliamentary groups welcomed the concerns about the referendum but did not agree on what measures to take.

In particular, according to the referendum (1180 dB), digital multinationals should be obliged to tax their profits in Austria in the future. Sales tax rates should vary according to their contribution to the maintenance of jobs in the region, whereby the same product should face a lower sales tax if bought locally. Thanks to the provisional regional transfer tax, internet sellers should contribute to the maintenance of city centers. As a compulsory contribution to the activation of regional city centers, ORF must also advertise cities, for example with a fixed amount of advertising time per region. In addition, the initiators are calling for a public vote in parliament on the measures listed “without club pressure”.

People’s petitioners: time for politicians to take action

“It is about sending a signal to support regional trade,” said Eduard Egger, representative of the referendum, in his speech. “We have to work together now so that business does not disappear one by one.” The task of the state is to compensate for the unfavorable competitive conditions of stationary trade as compared to internet trade. More and more shops would become empty in local centers, which would result in the loss of jobs and practices.

According to Egger’s deputy Andreas Palli, it is “time for politicians to take action” because the topic can no longer be “discussed”. “Buy Regional” is a topic all over Europe. Even though they are the “backbone of the economy”, small shops “stand no chance against Amazon and Co” today. However, the EU was created to compensate for the unfavorable conditions of competition. Parliament must also do justice to its supervisory role here. In this context, Palli emphasized one of the basic postulates of the referendum. The aim is to treat stationary trade differently in a sales tax than companies without a domestic branch. Austria could play a pioneering role here.

Mayr: Global regulation is needed to tax big internet corporations

In fact, concerns about the referendum are welcome, because it is about tax justice, said Gunter Mayr, tax law expert at the Ministry of Finance. “Digital people must not pay less tax in Austria.” However, it is important to clarify what is possible under EU and WTO law. When it comes to higher taxation of multinationals, Austria is already an international pioneer with the introduction of a digital corporate tax in 2020. However, according to Mayr, you can only set national initiatives, it is about global regulation to force large internet groups to do more tax justice. The expert assessed as a success the proposals of global tax reform, which last year were widely supported by OECD and G20 countries. Mayr was skeptical about the initiators’ proposed sales tax cut for stationary trade. The EU shapes the internal market, so the same product must be taxed the same everywhere. Moreover, different levels of taxation lead to additional bureaucracy.

Will: Fair play must also be established online

“Fair play must also be created on the Internet,” emphasized the managing director of the industry association Rainer Will. The framework conditions should be the same for all market participants. However, it is important to distinguish between Austria-based online trading and third country companies that do not have a local branch. Will was also skeptical of “taking its own action at national level” and welcomed the agreements at OECD level. However, the managing director of a trade association was critical of the postponement of implementation until 2024. Will believed that proposals for a sales tax reduction for established trade were as difficult as the often mixed forms of “online and offline trading”.

The trade association made other suggestions to strengthen the stationary trade. According to Will, the intention is to abolish rents, expand childcare facilities to increase worker flexibility, and no further restrictions related to the crown. The opening on Sunday is currently not financed by double surcharges.

Groups welcome referenda but disagree on measures

All the members who spoke spoke about an important initiative and thanked the initiators and supporters of the referendum. Eva-Maria Himmelbauer (ÖVP) said they all agreed when the problem was outlined and that regional purchasing behavior increased the creation of local value. However, the ÖVP mandate was skeptical about the proposed measures as they could frustrate projects and subsidies for businesses to participate in online commerce. For her parliamentary colleague Christoph Stark, awareness-raising is paramount. The referendum contributed to this. According to Stark, there is now a general shift in the retail landscape and customer purchasing behavior, so it’s important to continue to support businesses with digital marketing measures and reduce constraints.

Maximilian Lercher (SPÖ) replied that problems cannot be solved by awareness-raising alone. “There is a system failure in the market and we need to intervene” to change the “framework conditions on a large scale,” said the SPÖ deputy.

Erwin Angerer (FPÖ) also spoke about the important issue that initiated the referendum. However, he was skeptical that the international level had made a commitment not to take any further steps until an agreement was reached at OECD level.

Strengthening city centers is very important to her, but it would not be possible without stationary trade, says Elisabeth Götze (The Greens). The Greens mandate described the referendum proposals as legally difficult. There is no point in breaching EU law. It is important to strengthen the competition authorities and to introduce a global minimum tax swiftly. For Jakob Schwarz (the Greens), lowering the income tax as part of the tax reform is an important step towards relieving the labor factor. Moreover, the introduction of a CO2 price would make returns more expensive.

“We share your concerns, but not your suggestions,” emphasized Gerald Loacker (NEOS). There are many ways to support stationary trade without violating EU law. For Locker, it’s all about reducing bureaucracy, liberalizing opening hours, abolishing rental fees, and no further blockades due to the krone pandemic. His colleague from the parliament, Karin Doppelbauer, joined him. For the mandatarin NEOS, changes to spatial planning are also necessary, as they would often hamper business in downtowns and city centers. (Continuation of the Economic Committee) med


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