German Conservatives Approve Tax Cut Delay

by Ulrika Lomas, Tax-News.com, Brussels

23 August 2002

Friederich Merz, the parliamentary floor leader for the Christian Social Union/ Christian Democratic Party alliance has announced that the conservatives will not use their majority in Germany's upper house to block Chancellor, Gerhard Schroeder's plans to postpone tax reforms in the wake of the recent flooding.

German newspaper, Handelsblatt reported that, speaking at a pre-election rally on Wednesday, Mr Merz revealed that: 'We don't believe that this proposal offers the best solution, but efforts to provide fast and effective aid to the flood victims will not fail on our account.'

However, he went on to express the conservative opposition to Finance Minister, Hans Eichel's suggestion that corporate taxes should be increased by 1.5% in order to fund further flood relief, arguing that it is unfair to force private citizens and small businesses to foot the bill whilst sparing big corporations.

The Opposition candidate for Chancellor, Edmund Stoiber earlier this week proposed the reintroduction of capital gains tax on the disposal of large corporate shareholdings, reasoning that the current system affords large corporations an unfair advantage.

'If we propose any improvements, we will prepare them in time to be able to present them as an alternative to the voters on Sept. 22,' Mr Merz concluded.

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