The President of Germany’s Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) has advocated for tax relief measures concerning the defense industry. In an interview with the “Neue Osnabrücker Zeitung”, Annette Lehnigk-Emden suggested a reduction in value-added tax (VAT) on defense goods warrants consideration.
Lehnigk-Emden explained that lowering the VAT rate would effectively increase the purchasing power of the defense budget, allowing for the procurement of more equipment and resources. She noted that currently, 19 percent of Germany’s defense spending is allocated to the finance ministry as VAT.
Conversely, the BAAINBw President dismissed the concept of a windfall profits tax on defense companies. Lehnigk-Emden argued that such a tax would ultimately be passed on to the state in the form of higher prices. “Companies would simply factor it into their calculations and the state would end up paying more” she stated. This perspective comes as the German Left Party in Bremen and the European Parliament are currently considering proposals for just such a tax.
