Germany plans tax cuts to boost stagnant economy

FRANKFURT: Europe’s top economy is planning tax cuts to help kick-start growth, a German government spokesman said Monday, adding that the aim was to pass the measures soon.

The government is looking at new tax credits for research, investment and electric company cars as well as cuts to corporation tax of one percent a year for five years from 2028 onwards, finance ministry spokesman Maximilian Kall told reporters.

“Everybody’s aim... is to boost the economy now,” Kall said. “Everybody’s goal is to stimulate the economy, secure jobs, support companies and mobilise investment.”

Germany’s economy is struggling to emerge from a persistent slump, hit by high energy and labour costs at home as well as increasingly fierce Chinese competition and new trade barriers imposed by US President Donald Trump.

The government officially forecasts zero GDP growth for this year after the economy shrank slightly in 2023 and 2024. The government would look to get the measures passed as quickly as possible, Kall added, saying the cabinet would consider a draft bill on Wednesday.

“Intensive discussions” were underway with the aim of getting them passed by parliament before the summer break, Kall said.