TAX NEWS - June 2010

German Tax: German Economics Minister says Tax Cuts Possible In Next 3 Years

The German government should pursue tax cuts during the three years that remain of its current term, Economics Minister Rainer Bruederle said Wednesday.

Bruederle said he agrees with Chancellor Angela Merkel's plan to focus first on fiscal consolidation, a plan that earlier this month saw her unveiling some EUR80 billion in budget cuts over the next four years.

However, Bruederle said, some form of tax relief is still desirable, as per the agreement between his Free Democrats and Merkel's conservative bloc in the coalition treaty they drafted as they took office last autumn.

Merkel said in May she wouldn't pursue tax cuts through 2012.

Bruederle also said that though the government isn't due to update its growth forecast for 2010 until the autumn, it will almost certainly be higher than the current 1.4% mark.

"The outlook for more than 1.4% growth is there," the economics minister told reporters.

Many economic institutes have been raising their forecast for German growth, including the RWI think-tank, which on Wednesday raised its outlook for 2010 expansion to 1.9%.