Germany Unveils Economic Revitalization Through Tax Reforms

Germany's new government announced a tax package to boost its struggling economy, including tax breaks and cuts for companies investing in machinery and electric cars. A gradual reduction in corporate tax rates is planned from 2028 to 2032. Industry leaders seek further measures, such as lowered electricity costs.

Germany's new government unveiled a comprehensive tax reform package aimed at reviving its faltering economy. Chancellor Friedrich Merz's Cabinet launched a 'growth booster' program focusing on significant tax write-offs for machinery and equipment investments over the next three years, pending parliamentary approval.

The program will also gradually reduce the corporate tax rate from 15% to 10% between 2028 and 2032, alongside tax incentives for companies investing in electric vehicles and research. Finance Minister Lars Klingbeil emphasized enhancing Germany's competitiveness on the international stage.

While the tax package signifies a robust strategy, various industry bodies have advocated further support, such as reduced electricity prices. This initiative is distinct from the 500 billion-euro infrastructure fund planned to modernize Germany's assets over 12 years.

(With inputs from agencies.)