(Reuters) - German Finance Minister Wolfgang Schaeuble has proposed scrapping the "solidarity tax" that supports the country's poorer eastern states when it expires in 2019, a German newspaper reported on Tuesday.
But the Passauer Neue Presse newspaper said Schaeuble also proposed raising other taxes so that there would be no loss of revenues for the state. It said the proposals came during discussions on tax issues between the federal government and Germany's 16 states.
Germany is under pressure from its euro zone partners to cut taxes and boost investment to help stimulate economic growth.
Schaeuble will present plans in parliament on Tuesday for the 2015 budget, which aims to be the first balanced federal budget since 1969. Introduced after German unification and raising about 15 billion euros a year, the 5.5 percent solidarity tax on income and investment income was originally planned as a short-term measure.
The tax, which helps pay to rebuild eastern German infrastructure, has been repeatedly extended and is a source of tension between east and west Germany. But Steffen Kampeter, deputy finance minister, told German TV on Tuesday that no decision on the solidarity tax had been made yet.
He said it was part of the current fiscal discussions. "The talks about what's going to happen after 2019 are still taking place and there's been no decision whatsoever," Kampeter said. "We never said that the 'solidarity tax' would stay in place for a long time."
reuters.com
But the Passauer Neue Presse newspaper said Schaeuble also proposed raising other taxes so that there would be no loss of revenues for the state. It said the proposals came during discussions on tax issues between the federal government and Germany's 16 states.
Germany is under pressure from its euro zone partners to cut taxes and boost investment to help stimulate economic growth.
Schaeuble will present plans in parliament on Tuesday for the 2015 budget, which aims to be the first balanced federal budget since 1969. Introduced after German unification and raising about 15 billion euros a year, the 5.5 percent solidarity tax on income and investment income was originally planned as a short-term measure.
The tax, which helps pay to rebuild eastern German infrastructure, has been repeatedly extended and is a source of tension between east and west Germany. But Steffen Kampeter, deputy finance minister, told German TV on Tuesday that no decision on the solidarity tax had been made yet.
He said it was part of the current fiscal discussions. "The talks about what's going to happen after 2019 are still taking place and there's been no decision whatsoever," Kampeter said. "We never said that the 'solidarity tax' would stay in place for a long time."
reuters.com
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