Germany plans tax changes to help households cope with inflation – officials

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FILE PHOTO: The spread of the coronavirus disease (COVID-19) in Germany

BERLIN – Germany’s finance ministry wants to raise income tax thresholds and slightly increase child benefits in response to the highest inflation in the country in decades, ministry officials said on Tuesday.

The tax free allowance will rise to 10,632 euros next year and 10,932 in 2024 from 10,347 euros currently, the officials said. Meanwhile, the top tax rate will kick in from an income of 61,972 euros next year and 63,515 euros in 2023 compared with 58,597 euros currently.

Child benefits for the first two children will rise by 8 euros to 227 euros next year, the officials said.

Tax revenue is set to decline by 10.12 billion euros next year as a result, and 17.5 billion in 2024, the officials said.

The changes aim to provide some relief to households after German inflation hit 8.5 % in July, driven by soaring food and energy prices.

(Reporting by Christian Kraemer; Writing by Sarah Marsh; Editing by Peter Graff and Jane Merriman)

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