Taxes: Electricity tax reduction for industry more expensive than planned

The planned reduction in electricity tax for the manufacturing sector will be more expensive than expected.

Taxes: Electricity tax reduction for industry more expensive than planned

The planned reduction in electricity tax for the manufacturing sector will be more expensive than expected. The traffic light coalition expects costs of 3.25 billion euros for 2024 and 2025. This emerges from a draft of the budget financing law, which is available to the German Press Agency. When the concept was presented, government circles said it would cost 2.75 billion euros.

Last week, Chancellor Olaf Scholz (SPD), Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens) put together a package to relieve the burden on industry and small and medium-sized businesses in view of the high electricity prices. Among other things, the electricity tax for all manufacturing companies is to be reduced to the minimum value permitted in the EU. This means it falls from the current reduced rate of 1.537 cents per kilowatt hour to 0.05 cents per kilowatt hour. This should initially be regulated by law for the years 2024 and 2025 and financed from the core budget. “There is agreement that the reduction should apply for another three years, provided that counter-financing can be provided in the federal budget for the years 2026 to 2028,” the federal government announced - that is, if money can be found for it.

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