German Finance Minister Lars Klingbeil is spearheading significant tax reforms aimed at bolstering the country's economic competitiveness. The reforms include comprehensive tax cuts for businesses, featuring special depreciation options for investments and a phased reduction of the corporate tax rate from 15% to 10% by 2032. These measures are intended to enhance investment profitability and provide substantial financial relief to companies.
The proposed legislation, set to be discussed by the federal cabinet, seeks to provide immediate benefits with an 'investment booster' allowing firms to claim up to 30% in special depreciation for investments made between 2025 and 2027. Additionally, the plan incorporates a generous tax incentive for purchasing electric vehicles, enabling companies to deduct 75% of the cost from their taxes.
Despite the economic ambitions, the plans have sparked criticism from the Left Party, which deems them socially unjust, arguing they primarily benefit the wealthy and neglect middle and lower-income groups. Party leader Ines Schwerdtner has called for broader financial relief for the general populace and a cap on subsidies for electric vehicles priced above 30,000 euros.
In parallel with these fiscal initiatives, Klingbeil is intensifying efforts to combat tax evasion and undeclared work. He plans to deploy additional customs officials to recover billions in lost revenue, addressing long-standing issues of tax fraud. This dual strategy aims not only to stimulate economic growth but also to ensure fair tax practices, reinforcing both fiscal responsibility and social equity.
