Germany's Ruling CDU Party Discusses Extensive Tax Reforms

by Ulrika Lomas, Tax-News.com, Brussels

03 February 2009

Secretary General of Germany’s ruling Christian Democratic Union party (CDU) Ronald Pofalla has announced his party’s plans to undertake an extensive reform of Germany’s tax system during the next parliamentary term, provoking unrest within his own party. Chairman Volker Kauder has called for order.

Breaching an agreed party directive to remain silent on future tax policy, Pofalla has reported that consensus within the Union party is to undertake a structural reform of the tax system. The first stage of the reform, to be implemented this year, Pofalla reveals, is to reduce the volume of the tax burden by approximately EUR3bn.

According to CDU Chairman Kauder, however, conducting the debate on future tax reductions in public is proving severely damaging to the party’s election chances in September.

Urging his party to present a united front, Kauder emphasised the importance of refraining from engaging in public debates until the new tax concept has been finalised – as is intended by Easter.

Eager to extol the virtues of the overhaul, key to delivering a simple, fair and low tax system, Pofalla remains adamant, however, that details of the tax reform will form part of the election campaign itself.

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