The Federal Ministry for Economic Affairs (BMWE) announced Tuesday that it has approved the Income Tax Reform Law during departmental coordination. The government draft is scheduled to be decided by the Federal Cabinet on Wednesday.
This development follows recent reports of criticism from Katherina Reiche (CDU) regarding the policies of Federal Finance Minister Lars Klingbeil (SPD), specifically concerning the reduction of what is known as “cold progression.” Reiche’s ministry has subsequently confirmed that she supports the agreements reached by the Coalition Committee.
According to the ministry, the government draft “essentially reflects the decisions of the Coalition Committee of July 1, 2026.” However, the Wirtschaftsministerium noted that discussions about the Income Tax Reform Law were also used as an opportunity to present its fundamental economic policy viewpoint on taxation for the years to come.
