In a bid to rebalance the distribution of value-added tax revenue, the leader of Germany’s Christian Democratic Union (CDU) in the state of Baden-Württemberg, Manuel Hagel, has called on the federal government to allocate a larger share of the tax to local authorities.
Speaking to the Focus, Hagel emphasized the need for a more equitable redistribution of the value-added tax, citing the current allocation of 53% to the federal government, 45% to the states and just 2% to the municipalities as unsustainable. He argued that the federal government should relinquish a portion of its share to enable local authorities to fulfill their responsibilities.
Hagel also stressed the necessity of a comprehensive reform to reorganize the financial relationships between the federal government and the states, stating that such a reform would be a key priority for the CDU in Baden-Württemberg.