GBP Monitor Report April: Most Tax Experts Are in Favor of Reducing Business Taxes

The recently adopted Growth Opportunities Act was designed to increase competitiveness and investment incentives. But are the tax measures of the law sufficient to achieve these goals? The current survey of the German Business Panels (GBP) shows that this is not the case. The GBP data show that companies and tax experts are dissatisfied with the economic policy and that they have little hope that the policy will change. However, they agree on what tax policy could do.

After numerous negotiations and adjustments, the German Bundestag and Bundesrat have adopted the act to strengthen growth opportunities, investment, and innovation as well as tax simplification and tax fairness (Growth Opportunities Act) in March 2024. It aims at improving the liquidity of companies in Germany and at creating important incentives for investment and innovation. The law is intended to revive Germany’s stagnating economy. The law contains measures such as tax simplifications or the raising of thresholds and flat rates. However, it does not provide for a fundamental tax policy reform. The current GBP survey among experts and the GBP survey among companies provide information on the measures which are considered necessary by tax experts and decision-makers in the economy.

The expert survey shows a clear result. 55.8 percent of the more than 250 experts at universities and research institutions are in favor of reducing business taxes, while only 10.8 percent would support an increase in business taxes. How could business taxes be reduced? 72.5 percent of the survey participants are in favor of completely abolishing the solidarity surcharge, which limited companies still have to pay (although many wage taxpayers and partnerships no longer have to pay the solidarity surcharge).

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