Approval for tax reform

Press, 24 March 1988, Page 32

Approval for tax reform

NZPA-Reuter i Bonn, i The West German Cabi- i net has approved a major; fiscal reform to cut the national tax bill by 40 billion deutsch marks (jSNZ3S.6 billion) from 1990. | I ,j The Government described the reform as Jan I of the cen-i tury/' ■ I ! But industry' has criticised it as half-hearted rind! economists say the reform! should have come earlier! to stimulate sluggish' growth in Europe’s big-! gest economy. At a news conference,; Government spokesman Friedhelm Ost quoted Chancellor Helmut Kiohl as calling the reform "{the biggest relief for tax-: payers in the history! of the federal republic.” i The reform' includes a, reduction in the maxi-j mum rate of income tax to 53 from 56 per cent and a cut in corporation tax to 50 from 56 per cent. A controversial 10 per cent withholding tax ] on

sdme investment earnings will be introduced from 1989. I ; ' jThe tax | cuts will be partially offset by reductions in taxiconcessions by ; a|total 18.9, billion {marks, i so the net reduction in the ; oyer-all tax bill will be 20.7 billion! marks. I Finance | Minister Ger-. ‘ hrird Stoltenberg told re- ! pbrters he: expected the i reform to !be passed by ■ parliament before the : summer recess starting in : July. .. . | Mr. Stoltenberg said the : cut in company taxes was j "urgently i needed for ! reasons of international competitiveness.” | 1..! j Industrialists say the West German tax reform does not do enough for companies, and . many firms are 'investing abroad. ! ! ! The tax {reform follows .similar mpves in. many other countries, most recently Britain, the Netherlands' and Austria.: | The British Government last weey announced plans to cut the maximum •’ rate of income tax