Tax benefits for companies, incentives for those who work longer before retiring and measures to reduce bureaucracy are just some of the measures the German government hopes will make Germany more interested in business.
There are also plans to increase the immigration of foreign professional staff to Germany. “We are creating a tax break for foreign professionals during their first 3 years in Germany. There will be discounts of 30%, 20% and 10% for other people who “come here as qualified specialists,” said Federal Finance Minister Christian Lindner during the presentation of the new measures of the business-oriented Free Democratic Party (FDP) on July 5.
But the task was not well earned by many in Germany: “blatant discrimination against domestic workers. ” “a danger to social peace”, “a policy blatantly hostile to everyone here” “a general indifference towards the national workforce”. some of the comments made through opposition politicians and industry unionists.
However, complaints also came from the ranks of the ruling parties. The Greens cited the equivalent reparation precept of the German Constitution and the law on hard work. They argue that it might therefore be unconstitutional for certain teams to earn more for the same cadres through tax incentives.
Green MP Beate Müller-Gemmeke told DW that under the Basic Law, which serves as the country’s constitution, all Americans are equivalent before the law. “In Germany we have the precept of equal treatment, which means that no one will be treated worse. From my point of view, it would be a bit discriminatory towards nationals if we said that those who come from other countries are exempt from paying taxes on at least a safe part of their salary.
The main critic within the government coalition is the Federal Minister of Labor, Hubertus Heil. The politician from Chancellor Olaf Scholz’s center-left Social Democratic Party (SPD) told public broadcaster Deutschlandfunk: “We want to examine this more closely. We will have to be careful that there are no misunderstandings in public opinion. “
The complaint has been frustrating for the FDP, which has been fighting for months to stimulate the economy by all means at its disposal. Summing up the economic scenario in Germany, the CEO of the Association of German Chambers of Commerce and Industry, Martin Wansleben, stated: “The current scenario is bad for companies; for industry it is even worse. “
“In recent months, hopes have materialized that strong foreign activity or a recovery in domestic demand can act as a driving force for domestic companies,” Wansleben said.
One of the structural problems that has been manifesting itself for years is the severe shortage of professional staff in Germany. This is because more and more older people are retiring, while fewer and fewer young workers are available. Economists now say that the shortage of professional staff poses the greatest threat to long-term economic growth.
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According to a recent study by the German Economic Institute, there is currently a shortage of around 573,000 qualified workers in Germany. Economists have calculated that this year the economic expansion would be more than 1% higher (49 billion euros or 53 billion dollars) if there were enough personnel. It is a lot that the economic forecasts for 2024 expect an expansion rate of only 0. 2%.
In 2020, the government passed a Qualified Immigration Act, which has since been frequently amended. The goal is to remove as many obstacles as possible that could deter foreign staff from coming to Germany. These are basically bureaucratic obstacles.
But the expected influx did not materialize. According to a study by the Bertelsmann Foundation, around 70,000 professionals from third countries arrived in Germany in 2022. This figure is especially higher than the previous record of around 64,000 people in 2019, before the COVID-19 pandemic. still too little to compensate for the shortage.
The planned tax cut is a further attempt to make Germany more interested in pro workers. However, Labour Minister Hubertus Heil stresses that the most important thing is to remove bureaucratic obstacles and speed up the issuance of visas and professional accreditations.
The language challenge is also a serious obstacle, he says. Germany ranks fifth on the list of the most attractive countries for professional immigrants. “Ahead of us are 4 English-speaking countries. “
In reaction to a parliamentary request from the Greens in 2018, when they were still in opposition, the federal government presented a list of countries that offer tax breaks to foreign professional workers. It included Belgium, Denmark, Finland, France, Ireland, Italy, Luxembourg, Malta, the Netherlands, Austria, Portugal, Sweden, Spain, the United Kingdom, and Cyprus.
Steffen Hebestreit, a spokesman for the German government, also referred to this on Monday. “London is a monetary center, Paris is a monetary center, Milan is a monetary center, and Frankfurt is a monetary center. In all these places, as in many other European countries, there are such tax incentives and benefits to attract specialists. to those places.
However, according to Hebestreit, the federal government does not intend to grant tax advantages to all foreign personnel in the future. The plan is only intended for “certain sectors”, the main points of which are still in the development phase. “There will also be a minimum source of annual income to which this will apply, as well as a maximum threshold for billionaires not to get tax breaks that inspire them to come to Germany. “
This article was originally written in German.
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