BERLIN, Feb 15: The German Finance Ministry on Saturday denied a media report that the government was planning to bring forward tax cuts originally planned for 2005 to 2004.
Focus magazine reported in an advance report that Finance Minister Hans Eichel was prepared to bring forward tax relief plans. Quoting government sources, Focus said Eichel had already asked officials to conduct calculations for such plans.
The tax cuts planned for 2005 would save German citizens and companies about $17 billion, Focus said.
It is not planned to bring forward the tax reform measures planned for 2005,” a spokeswoman for the finance ministry said.
German Chancellor Gerhard Schroeder said in an interview this week that there was no scope to pull forward tax cuts planned for 2004 and 2005 to a single big reduction in January.
If it could be financed, one could of course consider that, Schroeder was quoted as saying by Stern magazine. But because we do not want to give up on the goal of consolidating the state budget, I don’t see any scope for that.
Eichel last month rejected reports he planned to bring forward tax cuts as nonsense, saying that such plans would hit tax revenues and thereby put Germany at risk of breaching European Union deficit rules.
Germany’s budget deficit exceeded the EU’s ceiling of three percent of gross domestic product last year, and the European Commission has demanded Germany takes urgent steps to get its deficit back under control this year.
German Chancellor Gerhard Schroeder has rejected a proposal to bring forward to July tax cuts that were delayed until 2004 to help fund rebuilding after devastating floods swamped the country last year.—Reuters
