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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