Excess profit tax would only exacerbate problems, says German finmin

A tax on excess profits would lead to further shortages in Germany and even higher prices at fuel pumps, said German Finance Minister Christian Lindner on Tuesday. Lindner, of the business-friendly Free Democrats, rejected an excess profit tax, amid indications that the other two parties in the ruling coalition, the Greens and the Social Democrats, are leaning in favour of such a measure.

A tax on excess profits would lead to further shortages in Germany and even higher prices at fuel pumps, said German Finance Minister Christian Lindner on Tuesday.

Lindner, of the business-friendly Free Democrats, rejected an excess profit tax, amid indications that the other two parties in the ruling coalition, the Greens and the Social Democrats, are leaning in favour of such a measure. Discussions about such a tax have gained traction as the war in Ukraine has led some companies and industries to post higher profits, with a particular focus on oil and gas companies.

"We don't know if there are excess profits," said Lindner, who added that such discussions were dangerous and that already high inflation levels should not be fuelled by political moves. Such a tax, said Lindner, would make tax law more arbitrary, opaque and bureaucratic and could hurt consumers, who would feel the damage most as prices rise in line with the global market.