Labor force - Minister rejects tax bonus for foreign skilled workers
Lower Saxony's Economy Minister Olaf Lies (SPD) critically views the tax relief plans for foreign specialized workers on a federal level. "This initiative bypasses the real challenges in recruiting foreign specialized workers and offers no solution," Lies stated in a press release.
There is a risk of a justice debate at the wrong place with these plans. "I find it hard to explain why equal work should not be worth the same. I am deeply concerned that this will sow a climate of resentment and envy. And that is the opposite of what is intended," the minister said.
Lies stated that one must inspire people to come to Germany. In Lower Saxony alone, he claimed, there is a shortage of 70,000 qualified labor forces. We need to lower hurdles, Lies demanded. As examples, he mentioned easier visa application procedures and faster recognition of foreign diplomas.
The planned tax bonus can be found in the Growth Initiative, which the coalition leadership of the Traffic Light Coalition decided on in connection with the compromise on the Federal Budget 2025 in the past week. The goal of the measures contained in it is to revive the stagnating German economy.
In the paper, it says: "To make Germany more attractive for foreign specialized workers, the federal government will also introduce tax incentives for employment in Germany. Newly arrived specialized workers can make up to 30, 20, and 10 percent of their gross salary tax-free in the first three years." For this tax exemption, lower and upper limits for the gross salary should be defined.
- The SPD's Economy Minister in Lower Saxony, Olaf Lies, has raised concerns about tax relief plans for foreign specialists at the federal level, expressing that they fail to address the core challenges in recruiting such workers.
- Lies expressed worries that the tax relief plans could inadvertently spark a justice debate and cultivate feelings of resentment and envy among locals.
- In his view, attracting foreign specialists to Germany necessitates removing barriers, such as simplifying visa procedures and expediting recognition of foreign diplomas.
- The planned tax bonus is part of the Growth Initiative, a measure agreed upon by the coalition leadership of the Traffic Light Coalition to reinvigorate Germany's stagnant economy.
- The initiative also includes a provision for tax incentives for foreign specialists employed in Germany, offering up to 30, 20, or 10 percent tax exemption on their gross salary within the first three years.
- The exact salary ranges for these tax exemptions are yet to be determined by the Federal Government, with the intention to increase Germany's appeal to foreign skilled workers.
