The Chairman of the Conference of Minister Presidents, Michael Kretschmer (CDU), has reiterated calls for financial compensation for the federal states and local authorities for the relief package planned by the federal government. "We want this innovation booster," said Saxony's Minister President after the meeting of the heads of the federal states in Berlin. However, the sums involved are so huge that they cannot simply be saved.
The federal government wants to use the relief package to create better tax write-off options for companies that use machinery, equipment and electric cars. Corporation tax is also set to fall from 2028. Both will lead to a loss of revenue, which will be borne disproportionately by the municipalities.
After three years of recession, Kretschmer said that finances are tight everywhere in the country. "In many places, the federal states and municipalities are struggling with the constitutionality of their budgets." The federal states jointly believe that a corporate tax reform is necessary. "It is an essential contribution to making Germany competitive." This topic must be discussed jointly between the federal and state governments.
