According to Florian Köbler, the chairman of the German Tax Union (DSTG), the planned income tax reform does not go far enough. He specifically critiques the fact that the so-called “cold progression” remains untouched and that the draft provides no measures to simplify the tax code.
Köbler told newspapers of the Funke Media Group that what is being marketed as a reform is essentially a tariff intervention: “A bit of a basic allowance, two new tax brackets, eight euros for child benefits-and the cold progression remains undisturbed.” He pointed out that the major omission is the lack of any sentence in the entire draft addressing how simplification will be achieved.
Furthermore, Köbler highlighted the significant revenue losses due to tax fraud, which he views as substantial. He stated, “While there is haggling over a relief of 5.6 billion euros, the state loses approximately 100 billion euros every year through tax evasion. To relieve honest taxpayers, they must start with the dishonest ones.”
Meanwhile, the federal government has planned the income tax reform, intending to introduce a higher basic allowance and changes to the income tax tariff structure. Overall, the plan aims to provide citizens with roughly ten billion euros in annual relief starting in 2028. However, according to the current draft, no compensation for cold progression is included. The proposal is currently undergoing internal government coordination.
