Merkel says post reunification 'solidarity tax' must stay

08 Dec, 2014

Chancellor Angela Merkel has ruled out doing away with the "solidarity tax" that Germany introduced after reunification to support poorer eastern states when the levy is due to expire in 2019.
The special 5.5 percent tax, which brings over 15 billion euros a year into federal government coffers, was originally envisioned as a short-term measure, but has been repeatedly extended despite opposition from some politicians who say it has outlived its usefulness.
Ahead of a meeting on Thursday between Merkel and regional leaders to discuss long-term financial arrangements between Berlin and Germany's 16 states, she said in her weekly podcast that costs associated with reunification were sure to extend beyond 2019.
"We will definitely need the revenues from the solidarity surcharge even after the pact expires," Merkel said.
She made clear that the money raised with the tax should flow to economically weak regions in western Germany as well as states in the former communist east.

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