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Eliminating loopholes.
Merkel scraps tax loopholes worth €2bn
>By Bertrand Benoit in Berlin
>Published: November 24 2005 18:16 | Last updated: November 24 2005 18:16
>>
Germany's new left-right government took its first step towards restoring the nation’s depleted finances on Thursday when it announced the immediate scrapping of tax loopholes worth about €2bn ($2.4bn, £1.4bn) a year in lost revenue.
At its first working session, the cabinet voted to bar investors in a range of closed funds from writing off their losses against income tax. Such funds are popular among high earners.
The speedy decision and the fact that the cabinet resorted to an emergency legislative procedure underline the fiscal pressure on the government.
Angela Merkel, the new chancellor, has vowed to bring the budget deficit into line with European Union fiscal rules by 2007 after five consecutive breaches. She aims to cut spending and raise taxes by €35bn over the next two years.
The measure will affect all closed funds launched after November 10 and all shares in these funds acquired since this date. Included are media funds, shares in commercial ships and containers, new energy and leasing funds.
The decision marks a U-turn for Germany, which has long sought to stimulate its domestic industry – from film-making to shipbuilding and wind energy – through tax incentives.
>By Bertrand Benoit in Berlin
>Published: November 24 2005 18:16 | Last updated: November 24 2005 18:16
>>
Germany's new left-right government took its first step towards restoring the nation’s depleted finances on Thursday when it announced the immediate scrapping of tax loopholes worth about €2bn ($2.4bn, £1.4bn) a year in lost revenue.
At its first working session, the cabinet voted to bar investors in a range of closed funds from writing off their losses against income tax. Such funds are popular among high earners.
The speedy decision and the fact that the cabinet resorted to an emergency legislative procedure underline the fiscal pressure on the government.
Angela Merkel, the new chancellor, has vowed to bring the budget deficit into line with European Union fiscal rules by 2007 after five consecutive breaches. She aims to cut spending and raise taxes by €35bn over the next two years.
The measure will affect all closed funds launched after November 10 and all shares in these funds acquired since this date. Included are media funds, shares in commercial ships and containers, new energy and leasing funds.
The decision marks a U-turn for Germany, which has long sought to stimulate its domestic industry – from film-making to shipbuilding and wind energy – through tax incentives.
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