The German Government agreed today on a plan of 50 fiscal measures to alleviate the economy worth 32,000 million euros (34,774 million dollars), encompassed in the so-called Business Opportunities Law.

The official announcement of the package, however, was received with little enthusiasm by businessmen, who expressed that the aid does not go far enough and criticized the lack of a commitment to subsidize the price of electricity.

The president of the German Association of the Automotive Industry (VDA), Hildegard Müller, commented that the law still needs “considerable improvements”, especially regarding the suspension of taxes on the minimum profits of companies, which according to her could significantly strengthen their liquidity.

Müller welcomed, however, the planned temporary introduction of new amortization rules, considering it “an important investment incentive for companies in the process of transformation.” For its part, the Chemical Industry Association criticized the lack of agreement on a subsidized price for electricity, arguing that its absence makes all other plans insufficient to solve Germany’s economic problems.

Finance Minister Christian Lindner, who rejects this subsidy, expressed his hope that the law would give a boost to the German economy by improving its conditions for attracting companies and laying the foundations for more private investment. “We cannot subsidize growth with new spending programs financed with taxes and credits, because that growth would not be sustainable,” he declared.

Germany adopts amortization measures

Among the tax measures approved, the new amortization rules for residential building builders stand out, whose objective is to boost the battered housing sector. For tax purposes, it is expected that companies will be able to more widely compensate their losses and the bureaucracy they must endure will be reduced.

After approval by the Government, the law must be debated in the Bundestag (Lower House of Parliament). However, for it to enter into force, the federated states must subsequently revalidate it in the Bundesrat (Upper House).

Since, under their terms, the plans mean regions will lose billions in tax revenue, such support is up in the air. For example, the mayor of the city-state of Bremen, the Social Democrat Andreas Bovenschulte, has already announced his vote against. “The fact that the federal government should only bear a good third of the costs and the states and municipalities two thirds is not acceptable to us under any circumstances,” he told dpa.

Source: dpa

(Reference image source: Immo Wegmann, Unsplash)

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The G7 considered as a “top priority” to reach an international agreement to stop discussions between countries on the taxation of digital giants, following the commitment set by the OECD and the G20 to reach a solution by mid-year, as reported in a statement.

The meeting held last Friday by the Ministers of Economy and Finance and the central bankers of the countries that make up the Group of Seven marks the beginning of the United Kingdom’s presidency for 2021. In addition, it was also the first meeting that has assisted Janet Yellen in her new position as Secretary of the United States Treasury.

The United Kingdom, as Chairman of the Group for this year, highlighted its commitment to the need to reach an international solution on taxation of the digital economy. The country urged the rest of nations to “work together” towards a “durable and multilateral” solution by mid-2021, the deadline agreed by the G20 and the OECD.

UK Finance Minister Rishi Sunak stressed that the British presidency’s priorities for 2021 include protecting jobs and supporting global economic recovery. During the meeting, ministers and central bankers discussed how best to respond to the different phases of the recovery, including how to support workers and businesses in the short term while ensuring long-term sustainability.

Sunak also highlighted during the meeting the “economic, sanitary and moral” imperative of achieving a “rapid and effective” distribution of vaccines throughout the world. For this reason, he has urged the G7 to take the initiative in supporting vulnerable countries during 2021.

K. Tovar

Source: Notiamerica 

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