Stoiber Plans to Replace Eco-Taxes with Tax on Pollutants | Business| Economy and finance news from a German perspective | DW | 24.04.2002
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Stoiber Plans to Replace Eco-Taxes with Tax on Pollutants

Germany's conservative opposition outlines plans to scrap "in the medium term" the eco-taxes introduced by the Schröder administration and to make up lost revenue with a tax on industrial pollutants.


Edmund Stoiber and Angela Merkel want to cut eco taxes in Germany

Germany's conservative opposition would "in the medium term" replace the ecological taxes introduced by the Schröder administration with a tax on industrial pollutants, Handelsblatt has learned. The plan is set out in the draft manifesto of the Christian Democratic Union/Christian Social Union alliance, a copy of which Handelsblatt has seen. Conservative chancellor candidate Edmund Stoiber plans to present the document next week.

Germany's governing coalition of Social Democrats and environmentalist Greens has used the revenue from ecological taxes – which are levied on individuals as well as businesses and cover petrol and other fuels, electricity, gas and heating oil – to keep down contributions to the state pension system.

Because the goal of keeping down non-wage labor costs has assumed such an importance, this has led to suspicions that a government led by the CDU/CSU – for all its criticisms of the ecological taxes – would do nothing to change the present system. The manifesto commitment is clearly designed to allay such suspicions. The sums involved are considerable.

The current government plans to pump 16.5 billion euros raised from eco-taxes into the state pension coffers next year. A government that decided to do without this money would be faced with a choice of raising the pension contribution rate by 1.7 percentage points or cutting the pension payout level.

To avoid either of these measures while at least being able to aim for the "abolition of the eco-taxes in their existing form" as a medium-term goal, Stoiber plans to use a model drawn up by the current CDU leader, Angela Merkel, when she was energy minister in the government of Helmut Kohl. Under this model, the revenue from the present eco-taxes – under which special dispensations are available to industry – would be raised from a tax on industry pollution.

Liability to the new tax would be measured on emission and discharge levels. The draft manifesto does not provide full details. But it will be difficult for the opposition to draw up legislation that complies with the large number of conditions laid down by the European Union for a new industry tax. A new tax should not, for example, have any impact on competition, and it should serve the interests of Europe-wide fiscal harmonization.

Until a model can be drawn up that can fulfill all these requirements, the present system will remain in place, according to the draft manifesto. But a CDU/CSU-led government would not go ahead with the hike in eco-taxes that the present government plans to make in 2003.

The SPD, meanwhile, plans to go ahead with the increase, which it sees raising an extra 3 billion euros in 2003. But the SPD's draft manifesto – which Schröder, as party leader, will present on Wednesday – makes it clear that this will be the last eco-tax hike.

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