Germany plans to lower taxes on home-based workers: experts say it would be unwise in Lithuania

Germany is taking the lead

As the world continues to fight the pandemic and with the introduction of compulsory work from home in the public and private sectors in Lithuania starting Wednesday, the German government is also considering how to encourage workers to stay at home.

Angela Merkel’s government announced plans to ease the tax burden on those who work from home during the pandemic, the portal said. Thelocal.de.

It was explained that such an offer would allow home workers to reduce the annual amount of taxes by 5 euros per working day, but would have a limit: the amount could not exceed 600 euros per year.

The portal also wrote that German tax law states that such benefits are available only to domestic workers whose home is used exclusively for work purposes.

Inga Ruginienė, president of the Lithuanian Trade Union Confederation, told Delfi that the German government’s proposal seemed illogical to her, as work-related costs should not be borne by the government and all taxpayers, but by the direct employer .

“First of all, in the case of teleworking, the labor costs must be borne by the direct employer. Be it a computer or electricity or a desk, a chair, everything you need to work, must be provided by the employer and delivered the employee, but not the state.

If we speak of the State as one of the main employers, which also allows the public sector to work remotely, it is subject to the same compensation mechanisms as a private employer, but it would be illogical to speak of tax compensation because it is an employer-employee relationship . , which must be regulated by mutual agreement, ”he explained, adding that taxpayers’ money should be used only for general purposes, in order to guarantee general functions in the country.

According to I. Ruginienė, there are employers in Lithuania who compensate employees who work from home today, but as they said, it is necessary to understand that it is a completely new way and last year many employers did not want to know anything about working from home . .

“Today is gaining more momentum, there is a second wave, more and more people are working from home and it is only now that the practice of how an employee should really work and what the relationship should be then is starting to take shape.

Taxes are not related to this at all. If we were to talk about some kind of public service or something completely different, or we simply wanted to reduce the tax burden for all citizens, it would be another matter, but in this case we would only be thinking about a part of the citizens. And how bad is someone who works in an office? What makes us different then? ”He asked, supporting the idea that it is not the state that should reimburse the costs related to the work, but the employer.

Increase income inequality, create livestock

Sigismund Mauricas, chief economist at Luminor Bank, also said he did not support the idea of ​​the state reimbursing work-related costs. According to him, people who work from home save money by not going to work every day.

“I would think that this would only add kerosene to the fire and would be an inconvenient solution, because not only people who work from home incur high costs, but they also save a lot, especially if they have to travel to work, which is a saving cost. Transportation, in addition to sitting at home, does not need protective equipment or masks. It also saves a lot of time, especially for those who have to travel a considerable distance to get to work, and the security is greater because these people have fewer contacts.

I don’t think we should go down that road and build that cattle farm that we avoid a lot, ”he said.

Regarding Germany’s decision to reduce the tax burden on domestic workers, Mr Maurice said that such a decision was more linked to Merkel injecting more money into the country’s economy for consumption.

“But it can really provoke the ire of part of the population, especially of those who have to go to work, say, doctors.

They cannot work remotely. So there would be a lot of discussion and nuance as to why some are more equal than others. I think the true roots of this decision are different and I think they can provoke many ambiguous reactions even in Germany itself, ”he said.

The economist said that more people from the public sector, municipalities, ministries, as well as those who normally work in offices, can work more from home today.

“And that would cause many studs in a flat place, because those who worked in offices and now from home, could save, and industrial construction workers, do not have the opportunity to work from home, I dare say that such a solution even it would increase income inequality. “He commented.”

No fund is seen as a possible tool for the future

Marius Dubnikov, a financial analyst and vice president of the Lithuanian Business Confederation, told Delfi that, speaking of the German example, one or a similar measure could certainly appear in Lithuania both in the future economic transformation plan and in the virus, but today its a bit late.

“But here, if we had responded in the summer, this measure would have been more timely, but now we don’t have enough funds for any additional incentives.

It turns out that now we want to support the business with 150 million. Eur, each one costs 2,5 thousand. Eur, who has grappled with COVID-19, it is clear that we cannot talk about such incentives at the moment, because today’s budget is so tight that even further support measures should probably be avoided.

It is not about the current stage, because now we have a fire at home and we have to put it out, and that incentive is longer term, ”he said, explaining that Lithuania now needs solid actions and solutions to control the virus.

According to M. Dubnikov, working from home for residents today costs less than going to the office.

“I would say that there could be a greater incentive for people themselves to realize that they can work from home and encourage them through the tax system, but, as I said, it should be in the future economic transformation plan,” he emphasized.

From Wednesday – work from home

Delfi recalls that the government adopted a new ban in an extraordinary meeting on Monday: the private sector will have to organize work as of Wednesday in the same way that state, municipal organizations or their companies have done so far.

“In state and municipal institutions, establishments, state and municipal companies and the private sector, work is organized and clients are served remotely, except in cases where the relevant functions (tasks) must be carried out at the place of work, “says the resolution.

In the workplaces that will be filled, it is mandatory to ensure the conditions for the management of the flow of people, observance of the safety distance, necessary public health safety, hygiene, provision of people with the necessary personal protective equipment established by the Statewide Emergency Operations Manual.

“It is mandatory to instruct both public and private institutions to work remotely, except in cases where it is not possible to guarantee the work regime by working remotely,” Acting Prime Minister Saulius Skvernelis said after the decision. .

It was also argued that stricter controls or more frequent inspections of employers are likely to take place.