Tax breaks for skilled workers spark debate in Germany

Germany is seeking skilled workers from abroad, enticing them with more than just high salaries. German Finance Minister Christian Lindner announced the introduction of a special tax break for foreign workers, reports "Deutsche Welle".

According to a study conducted by the German Economic Institute, which "Deutsche Welle" refers to, Germany lacks approximately 573,000 skilled workers. Economists estimate that "economic growth would be over one percent or 72 billion CAD higher in 2024 if there were enough workers available."

Martin Wansleben, Managing Director of the German Chamber of Industry and Commerce, said, “Currently, the situation of companies is bad, and in the industry, it's downright poor.” He pointed out that hopes regarding trade and, consequently, economic recovery have not been fulfilled.

Due to this economic stagnation, the German government is undertaking a series of actions to encourage business startups and attract foreign workers. One such action is the tax breaks announced by Finance Minister Christian Lindner, reports "DW".

We are introducing a tax break for skilled workers from abroad in the first three years of their employment in Germany. There will be breaks of 30, 20, or 10 percent for those who come to us as skilled workers – said Lindner.

This announcement was met with criticism from the opposition, who emphasized that such action is "blatant discrimination of citizens" and a "threat to social peace," reports "DW". However, the idea also caught the attention of politicians from the ruling coalition.

Green Party MP Beate Mueller-Gemmeke told "Deutsche Welle" that tax breaks for foreign workers might be inconsistent with the Basic Law of Germany, which is the constitution.

In Germany, the principle of equal treatment applies, which means that no one should be treated worse. From my point of view, it would be a certain discrimination against citizens if we said that those who come from other countries are exempt from tax, at least concerning a part of their salary – assessed Mueller-Gemmeke.