CDU plans minor tax reform as growth surges

CDU plans minor tax reform as growth surges
Photo: DPA
The surprisingly strong economic recovery in Germany has Chancellor Angela Merkel’s conservative Christian Democrats (CDU) planning small tax reforms worth some €500 million, a media report said on Monday.

CDU parliamentary group leader Volker Kauder told daily Financial Times Deutschland that the party had opened itself to the new measures following last quarter’s record growth figures, when the economy grew by 2.2 percent.

Among reforms would be suggestions recently presented by state finance ministers, he said.

Deputy leader of the CDU’s economic committee Christian von Stetten is working on the plan and told the paper that reforms were necessary.

“Now we must push through the overdue tax simplifications because the money is finally there,” he said.

But he also warned that tax reductions would be small.

“Our proposals for tax simplification will cost the nation, states and communities only about €500 million,” he told the paper.

The reforms will likely be set in motion within just a few months, he added.

The move could be an attempt to head off calls by the Christian Democrats’ junior coalition partner, the pro-business Free Democrats for deeper tax cuts.

Germany’s economy has bounced back from the worldwide financial crisis much sooner than anticipated, and in the second quarter of this year it notched up the fasted growth since reunification in 1990.

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