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German Firms Say Tax Burden Is Too High, Urge Faster Relief After New Ifo Survey

New results highlight labor levies as the top strain, with trade tax next and energy charges close behind, intensifying calls to prioritize income- and electricity-tax cuts.

Overview

  • Ifo surveyed 1,705 companies, including 1,358 family firms, between September 8 and October 17 for the Stiftung Familienunternehmen.
  • 83% cite taxes and social charges on labor as a strong or very strong burden, 72% point to the municipal trade tax, and 68% to energy taxes and fees.
  • Roughly 70% of respondents prioritize an income-tax cut, with electricity-tax relief next, ahead of accelerating the planned corporate-tax reduction.
  • Ifo economists recommend lowering mid‑range income tax, cutting the electricity tax for all firms, and reducing the corporate tax rate.
  • The government’s 2025 tax law provides special depreciation and a phased corporate‑tax cut from 15% starting in 2028 toward 10% by 2032, which critics say is too gradual and could be blunted by rising social contributions and local charges.