The German government is set to implement tax cuts aimed at revitalizing the economy, which is currently facing stagnation. New tax credits for research and investment in electric vehicles, alongside incremental cuts in corporation tax, are proposed. Finance Ministry spokesman Maximilian Kall emphasized the urgency of these measures, stating the goal is to bolster the economy, secure jobs, and encourage investment. However, critics raise concerns regarding the potential impact on local governments and question whether companies will reinvest savings or prioritize dividends instead. The government anticipates the measures could cost around 17 billion euros annually by 2029.
The proposed tax cuts aim to stimulate the economy by providing new tax credits and reducing corporation tax, amidst ongoing economic challenges Germany is facing.
'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.'
Critics argue that these tax cuts could harm local municipalities, fearing that companies may prioritize dividends over actual investment in growth.
Robin Winkler, Chief Economist at Deutsche Bank, described the plan as a 'welcome short-term stimulus for the manufacturing sector,' acknowledging limitations in its overall effectiveness.
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