The German Association of Cities and Municipalities (DStGB) welcomed the Bundesrat’s decision to reject the so-called “relief bonus” proposal. According to DStGB Managing Director André Berghegger, the federal suggestion was fundamentally a “business conducted at the expense of third parties”.
Berghegger stressed that cities and municipalities across Germany are currently facing an existential financial crisis. He argued that, despite acknowledging the significant effort of their employees, the local governments would not have been in a position to afford this bonus. Furthermore, he supported the states’ caution, pointing out that the states were correct to flag potential revenue losses stemming from projected tax shortfalls affecting both federal states and local communities. “In that regard, it is good that this idea is now off the table” Berghegger stated.
The original federal concept involved employers providing an untaxed bonus of up to €1,000. The states, through their votes in the Bundesrat, opposed the measure.