The German District Federation is expressing concerns about the feasibility of implementing the tax-free relief premium of 1,000 euros, as presented by the federal government on Monday. Kay Ruge, the Federation’s chief executive, told publications from the Funke Media Group that the federal government has showcased a relief measure without fully considering the impact on employers. He noted that employers now face expectations from their staff regarding this policy. For the districts acting as employers, this represents an additional financial strain, especially given the “historical municipal total deficit of 30 billion euros”.
According to the head of the leading association of municipal bodies, approximately 2.6 million union employees work across the districts, cities, and local communities alone. Ruge calculated that this would generate 2.6 billion euros in extra costs for local government units, further compounded by an estimated additional billion euros if the measure were extended to civil servants. Given the precarious financial situation at the municipal level, the federation stressed the necessity of clarifying the extent to which the federal government is prepared to compensate for these added expenses.
These relief plans were introduced by leaders from the “Black-Red” coalition amid significantly rising energy prices. In addition to a temporary reduction in taxes on gasoline and diesel, the plan allows employers to pay their employees a tax- and duty-free premium of up to 1,000 euros within the current year.