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German coalition fails to agree on electricity tax cut; plastic tax shelved
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Germany's coalition budget experts from the CDU/CSU Union and SPD failed to agree on how to finance a reduction in the electricity tax, according to Union parliamentary leader Thorsten Frei, who spoke in Berlin late Wednesday. Frei said the tax cut, a top priority for his faction, has not been cancelled but will be implemented later, possibly at the start of 2028. He also said the plastic tax criticized by the Union will not be introduced, and the planned sugar tax has been postponed to 2028. SPD parliamentary leader Matthias Miersch said relief on the electricity tax and full compensation for cold progression are desirable but must be solidly financed, and that the coalition will examine in coming days whether such counter-financing exists, noting it is not yet available.
Source report
CDU parliamentary group leader Thorsten Frei (center) looks anything but happy. Source: Carsten Koall/dpa
The plastic tax is not coming, and the sugar tax has been postponed. But the CDU was also unable to prevail over the SPD on a reduction of the electricity tax. That is the outcome.
The budget experts from the Union and SPD were unable to agree on a financing mechanism for a reduction of the electricity tax. However, the tax cut desired by the Union has not been cancelled but is to be implemented at a later date — for example at the start of 2028, said Union parliamentary group leader Thorsten Frei (CDU) late Wednesday evening in Berlin. The plastic tax criticized by the Union will not come, and the introduction of the sugar tax will be postponed to 2028, he said.
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"The reduction of the electricity tax has top priority for our parliamentary group, I can only say," Frei continued. "In this spirit, we will also try to bring the common goal into implementation as soon as possible."
Union and SPD were also unable to agree on a financing mechanism for fully offsetting bracket creep (cold progression). Relief on the electricity tax and bracket creep were "desirable," said SPD parliamentary group leader Matthias Miersch. "But it must be financed in a sound manner — and that is why we will now have to look in the coming days at whether this counter-financing exists, which has so far not been presented."
AFP/fro
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German coalition fails to fund electricity tax cut as Union MPs warn of lost credibility