Traffic light coalition decides on tax relief worth seven billion euros for companies to stimulate the German economy

Traffic light coalition decides on tax relief worth seven billion euros for companies to stimulate the German economy

According to a report by www.t-online.de, the German government has decided on a package of measures to stimulate the sluggish economy. The so-called Growth Opportunities Act provides for tax relief for companies amounting to seven billion euros per year until 2028. The law was approved with the votes of the traffic light factions SPD, Greens and FDP, but the opposition voted unanimously against it.

A key component of the law is a bonus for investments in climate protection. 15 percent of the costs of companies' energy efficiency measures should be subsidized as direct financial support. In addition, tax incentives are planned to stimulate housing construction, as well as further tax incentives for more research.

Approval by the Federal Council is unlikely because the states complain about the distribution of financial relief. They argue that they and the municipalities have to bear two thirds of the tax relief. The law is therefore likely to go to the mediation committee of the Bundestag and Bundesrat.

As a financial expert, I see these measures as important steps to stimulate the economy, especially given the current economic challenges. The tax relief for companies could lead to an increase in investments in the short term and strengthen competitiveness. The incentives for investments in climate protection and housing construction could have long-term positive effects on the environment and housing supply. However, the distribution of the financial burden between the states and municipalities is likely to be a challenge and potentially lead to further negotiations. Overall, it remains to be seen how the Growth Opportunities Act will affect the market and the financial sector.