Status: 08.04.2022 3:20 p.m
Many citizens are suffering financial losses as a result of the Russian attack on Ukraine and the corona pandemic. In order to counteract this, the federal government has decided on further relief measures.
In view of the increased energy prices and the consequences of the corona pandemic, citizens in Germany should be financially relieved. “We secure more money in the wallets of the citizens and we secure liquidity for the companies,” said Finance Minister Christian Lindner in the Bundestag. “In this way, we are supporting confidence in good economic development in the long term.”
The coalition agreed on another relief package. The focus is on the energy flat rate of 300 euros, which is to be paid out to employees via their pay slips. The self-employed may reduce their tax prepayment accordingly. The federal government wants to relieve taxpayers of eleven billion euros in this way.
There are also plans to make tickets for buses and trains cheaper: for 90 days, a ticket for nine euros per month is to be offered on local public transport throughout Germany. It is not yet clear when this ticket will start.
Tax relief due to pandemic
Even before the start of the Ukraine war, the traffic light coalition had agreed on an initial relief package in view of the rise in energy prices. Lindner said that in view of a situation characterized by a high level of uncertainty, it was imperative for economic and political reason to strengthen growth in Germany, counter inflation risks and cushion hardship. “But one thing is required for honesty: the state’s resources are finite, and in this situation it must not exhaust itself fiscally.”
The Bundestag also debated tax relief in the corona pandemic for the first time. Lindner emphasized that the degressive depreciation for so-called movable assets should be extended by one year. The plans also stipulate that employees should also be able to claim a home office flat rate in their tax return for this year.
Federal Council approves heating subsidy
Meanwhile, the Federal Council approved a one-off heating subsidy for millions of people. A one-person household that receives housing benefit should receive EUR 270, a two-person household EUR 350, and each additional family member receives EUR 70. Students and trainees who receive state aid are entitled to a one-off payment of 230 euros.
In addition, a planned tax relief law provides for raising the employee lump sum for income tax and the basic allowance. The increase in the commuter allowance for long-distance commuters, which is actually only due on January 1, 2024, is to be brought forward and amount to 38 cents retroactively to January 1. This measure is limited until 2026. The flat rate is currently 30 cents up to the 20th kilometer and 35 cents from the 21st kilometer.
Union criticizes planned measures
The aid had already been decided before the war in Ukraine, but originally with significantly lower amounts. Because energy prices have risen significantly since then, the SPD, Greens and FDP have increased the subsidy. According to the Federal Ministry of Housing, around 2.1 million citizens, such as pensioners, single parents or people who earn little, will benefit from this. The money should be transferred directly to the accounts without an application.
CDU financial politician Fritz Güntzler called the tax cuts proposed by the federal government “lacking creativity, courage and ambition”. The Union proposes that taxpayers could carry back losses for three years in order to be able to offset them against the profits from the pre-Corona year 2019.
Dispute expected between federal and state governments
According to a report by “Spiegel”, a dispute over the relief package is brewing between the federal and state governments. The focus is on the energy flat rate of 300 euros, which is paid to the employees via their payroll. Because the traffic light project is a tax measure, the federal states have to bear around half of the costs, depending on their share of the total revenue. There is now resistance to this.
The magazine reports that when Lindner shared a video with envoys from the federal states last Tuesday, concerns about burden-sharing were raised. According to the participants, the representative of the CSU-led Bavaria in particular pointed out that state finances were strained because of the influx of refugees from Ukraine. Lindner’s employees expected that in further negotiations in the coming weeks the federal states would insist that the federal government take on a higher proportion of the relief.