Conservative allies of Germany's chancellor Angela Merkel are mulling minor tax cuts, media reported today, days after data showed Europe's largest economy was growing at its fastest rate since reunification.
Finance minister Wolfgang Schaeuble was working on a plan for "noticeable tax simplifications" and investigating legal and financial aspects of a reform, Handelsblatt newspaper quoted an unnamed spokesman as saying in today's edition.
Germany's economy is set to grow by well over 2 per cent this year, with some economists even anticipating an expansion above 3 per cent, after an export-led recovery from the country's deepest post-war recession accelerated in the second quarter.
The parliamentary floor leader of Merkel's Christian Democrats (CDU), Volker Kauder, told the party he was open to a reform that would ease the tax burden slightly, the Financial Times Deutschland (FTD) newspaper said, without citing sources.
"Now we have to implement overdue tax simplifications because we finally have the money for it," Christian von Stetten, deputy head of the business wing of the CDU was quoted as saying in the FTD.
"People have understood there won't be big tax cuts. But our proposals for tax simplifications cost ... only about €500 million," he added.
Yesterday, foreign minister Guido Westerwelle reiterated calls for a simpler tax system and to cut the burden for middle-income earners. Westerwelle leads the business-friendly Free Democrats, the junior partner in Merkel's ruling coalition.
"We are still aiming for a simpler tax system and one that is lower particularly for middle-income earners," he told the Bild am Sonntag newspaper, adding his party would look at such tax simplification in coming weeks.
Reuters