The German Chamber of Commerce and Industry (DIHK) fears for the effectiveness of Finance Minister Christian Lindner’s (FDP) Growth Opportunities Act. The package is intended to relieve the German economy of an average of seven billion euros per year through tax changes and reductions in bureaucracy.
“The law pursues the right goals and also offers a number of good measures that will relieve the burden on companies,” said DIHK Managing Director Martin Wansleben to the German Press Agency in Berlin. “However, a number of originally planned improvements in the political small-scale have been restricted again.” He was referring to the ongoing discussions in the Bundestag, but even the version approved by the Federal Cabinet fell behind Lindner’s original plans from the DIHK’s point of view.
Specifically, Wansleben criticized, among other things, the fact that losses should be credited less to the benefit of companies when determining the tax burden. “Such withdrawals take away the most important effect of the entire project. Above all, the German economy needs the signal that the federal government is relying on the strength of companies and wants to strengthen them by reducing bureaucracy and reducing tax burdens.”
Wansleben demands more money
The planned bonus for investments in climate protection requires more than the previously planned 400 million euros, explained Wansleben. “The requirements for receiving the bonus should be so simple that small and medium-sized companies in particular can benefit from it.” The DIHK also promotes so-called electricity partnerships, in which long-term electricity supply contracts between operators of wind and solar systems and electricity consumers from the economy are promoted.
The draft law provides for numerous tax policy measures. The federal government lowered its economic forecast in October and now expects economic output to decline by 0.4 percent this year. A key point of the Growth Opportunities Act is a bonus for investments in climate protection. Tax incentives are also planned to stimulate struggling housing construction.
The Federal Council must approve the Growth Opportunities Act. Countries have already criticized the plans because they are intended to cover a large part of the shortfall in tax revenue.
The German Association of Cities is also concerned about tax losses that municipalities could incur as a result of the law. “If it is not improved, the municipalities will be missing over 9 billion euros by 2028 due to this law alone,” said managing director Helmut Dedy to the Editorial Network Germany (RND) at the weekend. “That would slow down the urgently needed investments in climate protection, public transport, digitalization or all-day expansion.” Dedy is in principle in favor of the government wanting to stimulate the economy. “The fact that the federal government wants to obtain a large part of the funds for this from the municipalities is inappropriate.”
A public hearing on the Growth Opportunities Act is planned in the Finance Committee at the beginning of the week.
