Schäuble siad no to TAX cuts in Germany
Schäuble siad no to TAX cuts in Germany
Germany’s Finance Minister Schäuble emphasized that he would only place fundamental reforms of taxation on the political agenda provided that he felt in a position to implement them. This is not currently the case, he remarked. Indeed, given recent experiences, the black-yellow coalition must very carefully consider which laws to initiate, the minister added
According to Schäuble, deficit reduction remains the coalition government’s priority. Until there is rate to do so, the government should under no circumstances discuss reform plans, since such discussions merely serve to generate expectations, which in the end it will be unable to meet, he explained.
Despite a positive prognosis for the country’s economy this year, Finance Minister Wolfgang Schäuble has once again underlined the fact that there is currently no range to implement tax cuts in Germany, not only in view of the high level of state debt, but also given the lack of a coalition majority in the upper house of parliament or Bundestag.
Bavaria’s Economy Minister Martin Zeil of the Free Democratic Party has recently called for a swift reduction of income tax in Germany. Alluding to abundant tax revenues, Zeil posited that tax cuts could be possible from January 1, 2012. If November’s tax estimate is as positive as the previous year, this should signal the go-ahead for the government, Zeil stated.
As regards a possible reform of VAT tax in Germany, Finance Minister Schäuble warned that unless the government is able to bring about a big reform, it should leave well alone.
Ever cautious, however, Finance Minister Schäuble highlighted the need for the government to maintain its current savings course, to avoid falling into the trap, as in previous legislative periods, of creating new holes in state finances following initial successes.
Suggesting that 2010 is the comeback year for Germany in terms of growth of the economy, the government recently confirmed record growth of 3.6% – the highest since reunification, and stated that 2011 is also expected to be a good year.
In its official release, the government announced that it expects an increase in gross domestic product (GDP) over the course of the coming year of 2.3%, up significantly from its autumn prognosis of 1.8%. Germany’s economy is growing considerably faster than the euro zone average, it noted.
