German Leaders Fall Out Over Tax Amnesty Plan

by Ulrika Lomas, Tax-News.com, Brussels

14 August 2002

After German Chancellor Gerhardt Schroder advocated on Monday a tax amnesty for bringing back money secretly stashed in Switzerland and Liechtenstein, Finance Minister Hans Eichel dismissed the idea on Tuesday, causing a major rift in the Social Democratic party and damaging the SPD's prospects just weeks before German elections when they are already trailing in the polls.

Italy had some modest success with a tax amnesty earlier in the year, and opposition Christian Democrats and the Free Democrats are in favour of the idea; but it had been opposed until now by the SPD. "It's better to have people working in Leipzig than money sitting in Liechtenstein. That's the principle," said Mr Schroder, who wants the money returned to be invested in depressed areas such as East Germany.

Mr Eichel, on the other hand, is against an amnesty on both ideological and practical grounds. "I won't stand for the idea that people who have not paid their taxes should get special treatment and not pay as much as honest taxpayers," he said yesterday.

Recommended