Pressure is mounting on the German government to accelerate planned corporate tax cuts as concerns over a persistent economic slowdown deepen. Bavarian Premier Markus Söder, of the CSU party, has publicly advocated for bringing forward the gradual reduction of the corporate tax rate, currently slated to begin in 2028, proposing a potential implementation as early as July 2026, “provided our financial leeway allows”. Söder argues such a move would provide a crucial boost to the struggling national economy.
The current government plan involves lowering the corporate tax rate from 15% to 10% in five stages between 2028 and 2032. However, Söder’s call for acceleration reflects a growing sentiment within political circles that a more immediate intervention is necessary to stimulate investment and bolster business confidence.
Adding to the pressure, Baden-Württemberg’s Finance Minister, Danyal Bayaz, of the Green party, has suggested an even more aggressive timeline, proposing a reduction of the corporate tax rate by two percentage points as early as next year. Bayaz’s proposal would allow the targeted 10% rate to be achieved within the current legislative period.
The push for expedited tax relief is not limited to coalition partners. Astrid Hamker, president of the CDU’s Economics Council, has been a vocal critic of the initial plan, arguing that the delayed implementation of the tax cut – postponing significant relief until the end of the current legislative period – represented a critical misstep. Hamker contends that a more proactive approach to lowering corporate taxes should have been prioritized from the outset.
The growing divergence in opinion highlights a potential fracture within the German political landscape surrounding economic policy. While the government maintains the current timeline, the increasing calls for earlier relief risk escalating tensions and potentially forcing a reconsideration of the long-term strategy to revitalize the nation’s economic performance. The demands also raise questions about the government’s ability to balance fiscal responsibility with the urgent need to support German businesses.
