Working from home? This bank suggests you should pay more tax

Employees who continue working from home after COVID-19 should be taxed in order to help support lower-paid workers.

According to a new report by Deutsche Bank, such staff should pay a 5 per cent "Privilege" tax out of their salary for each day they choose to work remotely after coronavirus curbs lift.

The German lender in its report argues that the tax would leave the average employees no worse off since they would be saving money on commuting to the office, buying lunch on-the-go, and cutting on purchasing more work clothes.

Also Read: Permanent 'Work From Home' for IT employees now possible! Govt relaxes rules

The report further suggests the tax could be paid by employers on behalf of their work-from-home employees as they do not provide the latter with a permanent work desk, while those who are on low-incomes or are self-employed should be exempt.

The report from the bank's economic research unit has calculated that this tax could raise $49 billion (GBP 37 billion) a year in the US, GBP 7 billion in the UK, and EUR 20 billion (GBP 17.8 billion) in Germany. The money could be utilised to fund subsidies for lower-paid employees who cannot perform their jobs from home.

"Working from home will be part of the 'new normal' well after the pandemic has passed," said Jim Reid, global head of fundamental credit strategy and thematic research at Deutsche Bank.

Also Read: Big IT sector reform! Permanent Work From Home will boost global competitiveness

"Our calculations suggest the amounts raised could fund material income subsidies for low-income earners who are unable to work remotely and thus assume more 'old economy' and health risks," Reid added.

COVID-19 pandemic has "turbocharged" the repute of remote working, which was rapidly increasing before the crisis, according to Deutsche Bank strategist Luke Templeman.

"For years we have needed a tax on remote workers - COVID-19 has just made it obvious," Templeman noted adding that a large number of people have "disconnected themselves from the face-to-face world" and are yet leading a "full economic life." This, he stated, means remote workers are contributing less to the infrastructure of the economy "whilst still receiving its benefits" which is a "big problem for the economy."

As per Deutsche Bank's proposals, the new tax could also sustain people who have lost their jobs or been compelled to take on lower-paid roles while they retrain.

Also Read: Working from home may hit productivity in the long term; this is why