NEWS
German Chancellor Merkel Clarifies Tax Policy
German Chancellor Angela Merkel has confirmed that the aim of the coalition government is indeed to introduce further tax cuts in Germany. The Chancellor has also pointed out that the precise scale of the 2011 reductions has yet to be determined.
Eager to end ongoing speculation and controversy over the government's future tax policy, Chancellor Merkel has expressed her commitment to the structural reform of taxation, and to the introduction of a graduated system of income tax, as stipulated in the coalition agreement.
Merkel has also confirmed that the government intends to implement the reform – if at all possible – by 2011. The actual plans for the shape of the reform will be drawn up following the tax estimate in May, she added.
German Finance Minister Wolfgang Schäuble has refused to conduct a debate on the tax cut issue for the time being, emphasizing the fact that the development of the economy remains as yet very uncertain. The 2011 budget, together with any other medium-term finance planning, will be drafted in June, he concluded.
In the meantime, Schäuble has already set the course for a program of austerity measures. Indeed, alluding to 2011 as a “turning point,” Schäuble underlined the enormity of the task ahead, referring to the requirements of the country’s debt brake rule and of the European Union’s stability pact.
Tension has mounted recently between the ruling coalition parties over both the scale of further tax cuts and the timeframe for implementation of the plans. Despite the country’s record debt, the government is hoping to honor its plans to implement tax relief measures of around EUR24bn a year.
Given the current budgetary situation, however, the question of whether or not to postpone the plans or to scale down proposals has served to further fuel debate. The Free Democratic Party remains bitterly opposed to the idea.
Quelle: Tax-News.com
