Proposed tax relief for foreign workers faces flak in Germany

BERLIN – The proposed tax break being considered by Germany for foreign workers is inviting criticism as some decry that the move would be unfair.

The government of Germany unveiled the proposal in a 31-page document for allowing newly arrived skilled workers exemption of 30%, 20% and 10% of their gross salary from tax in the first three years.

The initiative aims to boost economic growth in the country and address severe shortages of skilled workers by filling in the gap through foreign workers; however, the proposal is being criticized.

In this regard, the head of Germany’s employers’ association expressed skepticism regarding the government’s plan to provide tax incentives for foreign workers, warning that such measures could lead to discord in numerous workplaces.

“The proposal contradicts the principle of tax fairness and sends the wrong domestic political signal,” Rainer Dulger was quoted as saying by Deutsche Presse-Agentur (dpa).

Meanwhile, German Finance Minister Christian Lindner, from the pro-business Free Democrats (FDP), proposed tax breaks for “top executives” from abroad, describing it as a potential “recruitment bonus.” despite acknowledging that employers had received the idea cautiously. 

“We will seek dialogue first,” Lindner stated and added that the government would not implement anything that employers aren’t willing to use.

It is to be highlighted that the government of Germany is easing visa restrictions for foreign workers as the labor crisis in one of Europe’s strongest economies has worsened; the country needs at least 4 hundred thousand immigrants each year to keep its firms running.

The shortage of skilled individuals has risen to unprecedented levels as statistics and surveys reveal. The German companies have also admitted that they are facing the heat of labor shortage which is also affecting their efficiency. 

In the same spirit, the government of Germany has recently introduced the opportunity card or Chancenkarte which allows foreign workers to arrive in Germany even without a job offer and search for employment.