Federal budget | Electricity tax for private households will not be reduced

The coalition is discussing the budget in the Bundestag. Photo: dpa/Elisa Schu Berlin. The reduction in electricity tax for private households sought by Chancellor Friedrich Merz (CDU) is still on the brink in the budget negotiations of the black-red coalition. So far there is no counter-financing for the required 5.4 billion euros. The Union and the SPD were able to resolve several points of contention, but will have to find further compromises before the final discussions in the budget committee on Thursday.

On Wednesday evening, however, the coalition partners were able to reach agreement on several planned taxes. There will be no tax on plastic packaging in 2027. The sugar tax on heavily sweetened drinks will be postponed until January 1, 2028. An increase in the sparkling wine tax is also off the table. In return, among other things, staff reductions in the federal administration should be increased.

There were also concessions to the SPD when it came to social benefits. Planned cuts in the immediate child allowance for low-income families should largely be eliminated. Asylum seekers are excluded. Changes to maintenance advances and parental allowance are still being negotiated. The increase in housing benefit planned for 2027 is to be suspended, but the basic scope of benefits is to be retained.

Opinions differ regarding further relief in view of high energy prices. While the Union declares reducing electricity taxes to be a priority, the SPD is primarily focusing on a fuel price cap that should not cost the state any additional money. A solution could be sought in the coalition committee next Tuesday.

The Union also adheres to a complete compensation of the so-called cold progression in income tax. This arises when inflation-related wage increases lead to a higher tax burden without increasing purchasing power. The relief would cost the federal, state and local governments around 4.2 billion euros. Retroactive implementation is also conceivable if no financing can be found initially.

The planned income tax reform by Finance Minister Lars Klingbeil (SPD) is scheduled to come into force at the beginning of 2027. From 2028 onwards, annual relief totaling ten billion euros is planned. Small and medium income earners and families in particular should benefit. dpa/nd

This article cost you nothing. Us: research, production and technology. We saved on office rent as well as printing and distribution. And we gave up salary. Nevertheless, the calculation doesn't work without you. We need 300,000 euros by the end of the year. You pay what you can, in return we keep writing.

No paywall, no small print, just one goal: that nd stays.