The idea of ​​taxing workers from home has met with unanimous opposition: one day it would cost about 3 euros

However, the German idea does not have the support of workers ‘or employers’ representatives. Inga Ruginienė, president of the Lithuanian Trade Union Confederation, emphasizes that working from home is not a privilege, and Andrius Romanovskis, president of the Lithuanian Business Confederation, points out that the new tax would be directed against the environment.

How would it work

The idea of ​​a work-from-home (DIN) tax was put forward by L. Templeman in the latest issue of Deutsche Bank’s Konzept publication.

“Our economic system is not capable of adapting to a society that communicates remotely. Those who can work from home have economic benefits and should pay taxes to help the victims, ”he writes.

The analyst refers to a study by S&P Global Markets, which found that two-thirds of organizations say that three-quarters of their employees can work efficiently from home. A Deutsche Bank survey showed that even after the pandemic, more than half of employees plan to work from home 2-3 days a week.

According to Templeman, the benefits of working from home outweigh the costs. The latter are related to stress and efforts to reconcile work and childcare, in ideal family office conditions ”, says the economist.

He says the new tax should only apply once governments have lifted quarantines and even recommendations to work from home.

“Of course, low-income freelancers shouldn’t pay it,” he added.

“Employers who do not provide permanent work or employees (of their own salary) who volunteer from home must pay,” Templeman said.

The analyst estimates that in the United States about 55 thousand. An additional 5% could be applied to a person earning $ 1 per year. rate, which would mean around $ 10 per day.

“About the same amount an employee spends on trips to and from work, lunch, laundry, etc. So 5 percent. the rate would not make their situation worse, ”he says.

In the second quarter of 2020, the average gross salary in Lithuania amounted to 1,398.5 euros and the net average to 889.2 euros.

Taking into account the application of the tax-free income rate, assuming that the person would work from home and instead of 20% full time. after applying 25% of IRPF. The employee would receive € 57.44 less, € 831.76.

Working three days from home and two from the office would reduce your salary by € 34.47 to € 854.73.

In total, a person with an average salary pays a GPM of € 13.68 per day. Increasing the rate to 25% would cost € 2.74 more.

Offers to find other sources

I. Ruginienė agreed that unions tend to advocate for further redistribution through the budget, which appears to be the goal of Deutsche Bank’s proposal.

“But we are in favor of higher taxes on capital, and here it is proposed to tax the common person who pays more taxes anyway.” If we were to tax more non-labor income, millions in profits, that would be another matter, “he said .

A union spokeswoman stressed that working from home is not a privilege.

“When you are assigned to a business trip, your employer thinks it is a privilege. While he is actually sacrificing time with the family, he is going to work. If you spend it on vacation, it would be a privilege,” he said.

I. Ruginienė also explained that even 3 euros per day is a significant amount for most Lithuanian employees.

“All employees pay taxes in solidarity and in good faith, and those taxes, from the budget, provide support to the same affected company. Entrepreneurs who obtain millionaire profits could also contribute jointly to the budget, for the benefit of the affected companies”, urged.

Finally, I. Ruginienė noted that not all employees behave as the Deutsche Bank analyst thinks.

It should be noted that employees do not necessarily travel by public transport, they can choose to cycle or walk. However, they can take food with them, not go to restaurants, and eat their own.

We don’t understand why you should pay an extra employee when you already have to work remotely, under stressful conditions, using your own resources. T. and. your personal internet, electricity and all the other stuff.

Only employers save in real terms. We should ask ourselves how employees should be compensated. The question could also be raised that if an employer saves, then they could pay more, ”said a union representative.

Public relations campaign

Romanowski was also skeptical of DIN’s new proposal.

“It just came to our attention then. In terms of content, this is more related to the bank’s fad public relations campaign. An idea for which you can find 100 arguments for and 100 against is discarded, he said.

The Employers’ representative noted that Mr. Templeman did not speak at all on the environmental aspect.

“After all, we understand that it is good for the environment when people work from home. Due to non-use of transport, carbon dioxide emissions, etc. People should be encouraged to do so and the tax would do the opposite”, said.

Romanowski also said that working from home was not necessarily a privilege.

“Maybe if you are a single programmer, then yes. In the West, employers pay for beginners and residency, work tools, then they can have benefits. For example, my employees would like to work in the office, not remotely, ”said the president of the confederation.

He described the Deutsche Bank offer as a kind of “mental exercise” in the context of a pandemic.

“The world is moving in the direction of the fourth industrial revolution, robotization is taking place. You have to think about what will happen to the personnel that the robots will replace. Then you can come up with those ideas, “said A. Romanovskis.

As you know, the quarantine was announced in Lithuania until November 29 due to the coronavirus pandemic, which is scheduled to last until at least mid-December. It is recommended to perform the work remotely whenever possible.