As of: February 9, 2024, 3:44 p.m
By: Amy Walker
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After a long struggle, the traffic light parties and the CDU and CSU have agreed on a growth opportunities law.
Tax relief for companies is planned to stimulate the economy.
Berlin – According to several traffic light representatives, the mediation group on the controversial Growth Opportunities Act has reached an extensive agreement with the Union.
Accordingly, the relief volume for the economy should only amount to 3.2 billion euros per year, as three people familiar with the negotiations told the
Reuters
news agency on Friday (February 9).
This means it is roughly halved and municipalities in particular are no longer burdened so heavily.
They are expected to account for 555 million euros of the state's expected shortfall in tax revenue, the federal government almost 1.4 billion and the states almost 1.3 billion.
Climate protection measures are no longer particularly encouraged
According to the insiders, the planned bonus of 15 percent of the total amount for investments in climate protection measures was dropped from the package.
She was actually the centerpiece.
Additional depreciation options are also planned for companies, including those involved in construction, and especially for small and medium-sized businesses.
The traffic light coalition made up of the SPD, Greens and FDP wants to use the tax relief to boost the sluggish economy.
However, states and municipalities had criticized the fact that they should receive the majority of the shortfall in tax revenue.
That's why the draft law was blocked in the Bundesrat.
The Union put the traffic light representatives' representation into perspective.
“For the Union, an agreement on the Growth Opportunities Act is still subject to the continued validity of the agricultural diesel refund being discussed in the mediation committee and an agreement being reached,” said CDU politician Mathias Middelberg to
Reuters
.
This puts too much of a burden on farmers, and SPD-governed countries are also of this opinion.
The Mediation Committee of the Bundestag and Bundesrat is scheduled to deal with the Growth Opportunities Act on February 21st.
The compromise could be formally approved there.
Lindner and Habeck both support tax relief
“We are very satisfied with the result,” said SPD financial politician Michael Schrodi to
Reuters
.
“There will be important growth impulses for the economy.” At the same time, however, the municipalities would be burdened less than originally planned.
“It is positive that there are additional depreciation options in construction and for small and medium-sized companies.”
Chancellor Olaf Scholz (l.) and opposition leader Friedrich Merz.
The traffic light and the Union were able to agree on tax relief.
© IMAGO / photo library
However, the federal government had originally planned tax relief through the Growth Opportunities Act amounting to around seven billion euros per year from 2024 and a total of over 32 billion euros in the next few years.
The current level is considered to be far too low to provide real economic stimulus.
Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens) have recently described Germany as a location that is no longer competitive on several occasions.
Tax cuts for companies are seen as a way to stimulate more private investment.
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FDP parliamentary group leader Christian Dürr said in an interview with the
Rheinische Post
that abolishing the solidarity surcharge for everyone would be easiest.
This would also relieve the burden on many entrepreneurs.
“I no longer want to have to rely on the Union for tax cuts, but rather do something that we can decide on our own in the coalition.”
Economy rather disappointed about agreement
According to Ifo boss Clemens Fuest, the agreement is not a big success.
“With this downsizing, the Growth Opportunities Act is just a drop in the ocean,” Fuest told
Reuters
.
In principle, improving depreciation conditions is moving in the right direction, even if the focus on climate and digital is too narrow.
“However, the volume of 3.2 billion euros is so small that it will hardly be noticeable in the overall economy,” said the renowned economist.
(wal/Reuters)