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Merkel Rules Out Refugee 'Crisis Tax'

by Ulrika Lomas,, Brussels

14 October 2015

German Chancellor Angela Merkel has rejected claims that the Government is considering a new tax or increases in existing taxes to help cover the costs of a surge in political asylum applications.

Merkel told German newspaper the Bild that additional sources of revenue to handle the well-publicized influx of refugees will not be necessary because the budget is in surplus and the Government's finances are in a healthy position.

"We can be pleased that we have been well managed for years and that our economic situation is currently good," she said, adding that there is "definitely" no need for extra taxation.

The German Government has also denied that it has been discussing the idea of an EU crisis tax with the European Commission, which, according to a report by the Sueddeutsche Zeitung, could take the form of a surcharge on petroleum or value-added tax rate increases. The revenues from these additional taxes would then be distributed to those EU member states on the front line of the migrant crisis, including Greece, Italy, and Spain. "The fact remains we don't want tax increases in Germany or to introduce an EU tax," Government spokesman Steffen Seibert confirmed in a statement.

However, German Finance Minister Wolfgang Schaeuble was more circumspect when asked about the report whilst attending an International Monetary Fund meeting in Lima, Peru. A solidarity tax "is a question for the European Commission," he said, according to Reuters. "In Germany we have fiscal space ... others in Europe probably don't have so much, and nonetheless the problem must be solved."

Germany expects to receive more than 800,000 asylum application this year, as displaced persons from Syria and other conflict areas continue to head for the safety of Europe.

TAGS: Finance | tax | European Commission | Syria | budget | Germany | Greece | Italy | Peru | Spain | Europe

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