Proposals Already Proposed by the Commission to Lessen Electricity Taxes
In a recent turn of events, the decision not to reduce electricity tax for all companies and private households has been made by the leaders of the Union and SPD. This decision, announced with a financial reservation in the coalition agreement, has been met with criticism from Baden-Württemberg's Minister President, Winfried Kretschmann.
Kretschmann has called for a reduction in electricity tax for crafts and small industrial companies, believing these businesses urgently need relief from rising electricity prices. He argues that medium-sized businesses play a crucial role in innovation, employment, and the economic prosperity of the country, and the priority given to electricity tax over economic competitiveness is incorrect.
The Federal Government, however, has decided to limit the electricity tax reduction to certain sectors, such as manufacturing, agriculture, and forestry, rather than extending it to all businesses and private households as initially planned. This decision was due to the high cost of expanding the tax cut to everyone, which would have required an additional 5.4 billion euros in the following year. Financing the measure by cutting spending in other areas proved difficult to agree upon.
Kretschmann's call for a reduction in electricity tax for crafts and small industrial companies in Baden-Württemberg was not implemented alongside the expansion of the mother's pension as originally announced in the coalition agreement primarily due to these financial constraints and coalition disagreements at the federal level.
The delay and scaling back of the electricity tax relief for small businesses have been described as a critical test of leadership within the CDU/CSU and SPD. Chancellor Friedrich Merz, in particular, is under pressure to deliver economic relief measures effectively.
On the positive side, the federal government has decided to implement the expansion of the mother's pension as soon as possible, preferably by 2027. Despite the setback in the electricity tax relief, the government remains committed to supporting businesses and families in these challenging economic times.
Kretschmann's call for a reduction in electricity tax for crafts and small industrial companies in Baden-Württemberg was not implemented due to financial constraints and coalition disagreements, particularly in the realm of politics and general-news, as the cost of expanding the tax cut to all businesses was high and financing the measure proved difficult. The delay and scaling back of the electricity tax relief for small businesses have been described as a test of leadership within the CDU/CSU and SPD, with Chancellor Friedrich Merz under pressure to deliver effective economic relief measures in the field of business and finance.
