Thuringia approves billion-dollar investment package for the economy

Thuringia approves billion-dollar investment package for the economy

Today, July 12, 2025, the Federal Council approved the federal government's immediate investment program with the votes of Thuringia. This relief package worth billions is intended to take particular account of the current economic situation in Germany and act as a growth booster. Thuringia's Economics Minister Colette Boos-John called the program an important step towards the country's economic recovery. The background is the slowing economic development, which is attributed to insufficient investments by companies.

The investment program provides for comprehensive measures to increase the competitiveness of companies. These include improved depreciation options for equipment investments and company electric vehicles. Corporate income tax is also to be gradually reduced from 2028. In order to create incentives for research and development, the research allowance will be increased. When fully effective from 2029, the relief effects are estimated to be around 18 billion euros annually abg-net.de reported.

Fiscal measures and progress

On June 26, 2025, the Bundestag passed key tax law announcements from the coalition agreement, which will apply from July 1, 2025. This includes the introduction of a declining balance for movable assets, which applies at 30 percent until the end of 2027. This measure and the gradual reduction in corporate tax from the 2028 assessment period are intended to provide additional relief for companies. Corporate tax will be reduced in five steps up to a final rate of 10 percent from 2032, as ey.com supplemented.

In addition, the research allowances will be expanded from 2026 by increasing the maximum assessment basis by two million euros to 12 million euros. Another incentive is increases in the hourly wage allowance for personal work and the company car tax for electric vehicles, where the cap is raised from 70,000 euros to 100,000 euros.

Challenges and needs

The current economic situation requires further steps to improve Germany's competitiveness. A key concern is energy prices. The electricity tax cut should be reduced to the European minimum level in order to provide relief for all electricity customers - from tradesmen to private customers. In addition, rapid implementation of tenders for the construction of additional controllable power plant capacities is necessary to ensure security of supply.

Managing rising social security burdens also needs to be addressed. Reforms in the areas of citizens' benefits, pensions and long-term care insurance are essential, and announced commissions should promptly develop proposals to limit the increase in costs in the social security systems.

The significant financial compensation for tax losses offered under the new program could make a crucial contribution to stabilizing the economy more sustainably and promoting future growth.