Germany Postpones Sugar Tax and Scraps Electricity Tax Cut Ahead of Budget Talks
Coalition leaders backed away from several tax and welfare changes as they try to close a €555.4 billion budget gap.
- On Wednesday, Germany's governing coalition walked back major planned tax and welfare reforms, delaying the sugar tax and shelving an electricity cut amid intense 2027 budget negotiations in the Bundestag.
- Chancellor Friedrich Merz's Union bloc and its SPD partners face significant time pressure to resolve remaining sticking points for Germany's €555.4 billion federal budget for 2027, as confirmed by parliamentary group leader Thorsten Frei.
- According to latest government plans, the sugar tax on heavily sweetened beverages will not arrive until the beginning of 2028, six months later than officials had previously scheduled for implementation.
- Protecting benefits including Elterngeld , Wohngeld , and state-funded Unterhaltsvorschuss , the governing coalition agreed to reverse planned welfare cuts while canceling proposed plastic packaging taxes for the coming year.
- Despite the measure previously gaining support from Merz during efforts to rebuild trust in Berlin, Germany's government shelved the promised electricity tax cut for the second time due to financing concerns.
29 Articles
29 Articles
The planned reduction of the electricity tax has been postponed – although it was in the coalition agreement. Families continue to pay high taxes on washing machines and dishwashers.
Zeit Online
The black and red coalition withdrew some planned projects shortly before the budget negotiations in the Bundestag. The plastic tax falls away, the sugar tax should only apply from 2028 and the increase of the sparkling wine tax is waived.
The reduction of the electricity tax will probably not come after all - despite the different promises. In the Union one does not want to accept that yet, and the opposition takes the chancellor Merz.
Sugar tax, housing money, electricity tax: what does the citizens have to do? What has the Union and the SPD agreed on in the budget - and what is still open?
»Autumn disappointment for the companies in Germany«: For the time being, the absence of a reduction in the electricity tax creates displeasure among business representatives.
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