Re-Use Austria
A recent study by the Institute for Economic Research analyzes the current incentive and funding opportunities of the Austrian repair sector. Conclusion: Lowering the VAT rate to cover all types of consumer goods repairs would be the most appropriate measure.
The authors Angela Köppl, Simon Loretz, Ina Meyer and Margit Schratzenstaller throw in the recently published study 'Effects of a reduced VAT rate on repair services' a close look at the Austrian repair sector. It quickly becomes apparent that there is still room for improvement - on the one hand, there is often a lack of knowledge about repair offers on the consumer side - on the other hand, there is often simply not enough supply.
But repair, as well as reuse, is a central pillar of the circular economy, as it extends the product life and thus conserves resources. Now, the question arises of how to change the situation in the long term - with which incentives can consumers be won over to make repairs? By what means can the repair sector be strengthened? Ideas have been around for a long time, also from RepaNet. Therefore, it was particularly exciting for us to receive the results of the present study - because this is where the possibilities for Austria, for the first time, are scientifically analyzed.
The authors proceed step by step. First, the role of the repair sector in the circular economy will be examined in more detail, including re-use. Among the data used is also the RepaNet Market Survey of 2017.
Proportional to the increase of our consumption would also have to increase repairs - but the opposite is the case: the services of the repair sector decreased in the period from 2008 to 2016 rather. This is read on three key figures - number of companies, turnover and number of employees - all of which are experiencing a downward trend that is currently even intensifying.
Here, best practice examples can help - that's why the authors take a look at current funding models of the City of Graz, Landes Upper Austria and the Landes Styria (Note: meanwhile there is also in Lower Austria a repair bonus). On the basis of this, four possible measures for funding are analyzed in more detail:
- Introduction of a reduced VAT rate for small repair services (bicycles, shoes, change tailors)
- reduced VAT rate for repairs of consumer goods (including electrical and electronic equipment)
- Extension of the repair check to the whole of Austria
- Indirect support through deductibility of the repair costs from the income tax analogous to the Swedish model
Of the options mentioned, the reduction of VAT on all types of consumer goods repairs is identified by the authors as the most direct and thus most promising measure. This is in line with RepaNet's position: companies could be permanently strengthened in this way, repairs would become more attractive and the circular economy would be boosted. That's why we are committed to it. In our Party poll before the National Council elections Most parties have also known about such measures - at least everyone agrees that repair must be made more attractive. At the Austrian level, at least the nationwide repair bonus could be introduced directly. At this point we want on the Parliamentary petition of RUSZ point out, among other things, that is required.
As far as VAT reduction is concerned, it is first necessary to apply it at the EU level - the VAT Directive is currently being revised here. RepaNet has long been working with its European umbrella organization RREUSE to reduce VAT for re-use and repair products and services (see RREUSE Position Paper).
More info …
Position paper by RREUSE on the revision of the VAT Directive
Sign parliamentary petition of RUSZ
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