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2 November 2005
BERLIN - Sales tax in Germany will be raised under an agreement Wednesday between designated German leader Angela Merkel and outgoing chancellor Gerhard Schroeder's Social Democrats, sources said.
Value added tax (VAT) will rise to 18 per cent from the present 16 per cent under part of a deal for a grand coalition government of the two political blocs, the sources told Deutsche Presse-Agentur.
Merkel campaigned on raising VAT while Schroeder's SPD had said they were opposed.
But with an estimated 43 billion euro (52 billion dollar) public sector budget deficit next year, moves are needed to raise state funds.
Copyright DPA with Expatica
Subject: German news
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