German cities’ association demands swift action on tax compensation
The German Cities’ Association has called for swift legislative action to fully compensate for the revenue losses faced by municipalities due to the government’s growth program. The association’s president, Burkhard Jung, made the demand in an interview with the Redaktionsnetzwerk Deutschland, a Friday edition publication.
Jung emphasized that the revenue shortfalls of municipalities must be completely offset and urged the coalition government to enshrine the compensation in the tax law, which is set to be finalized in the Bundesrat on July 11. “Now, we need to work quickly” the Leipzig mayor emphasized.
In contrast to the states, the cities’ association president did not advocate for the compensation to be ensured through a reallocation of value-added tax points. Instead, the association proposes that the joint federal and state share of the municipal business tax revenue, known as the Gewerbesteuerumlage, be temporarily adjusted to offset the revenue losses of cities and municipalities due to the “Investments-Booster.” “We are almost at the finish line, but not quite there yet” the association’s president said.