German finance minister pledges tax cuts from 2013

20th October 2011, Comments 0 comments

Finance Minister Wolfgang Schaeuble promised tax cuts Thursday to the tune of six to seven billion euros ($8.2-9.6 billion) annually from 2013, the year Germans next go to the polls.

He told a news conference that the cuts would kick in from January 1, 2013 and would essentially take place through a modification of the tax band system.

Tax cuts were a key pledge by Chancellor Angela Merkel's coalition government and its junior partner, the pro-business Free Democrats, during the 2009 electoral campaign.

But budgetary pressures due to the recession of two years ago and the need to redress the public finances in the eurozone debt crisis have prevented the promise from being carried out.

Economy Minister Philipp Roesler raised the issue again earlier this year as the German economy grew and tax income increased, with Schaeuble pledging then to make proposals.

German tax revenues came to 530 billion euros in 2010, most of which went to federal state and regional coffers.

The pledged cuts must be approved by the Bundestag, Germany's lower house of parliament, and the upper Bundesrat, where the government does not have a majority and opposition parties have shown little inclination towards tax cuts.

© 2011 AFP

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