Germany's ruling Social Democrats (SPD) have no plans to present fresh plans to reform the nation's tax code before early summer 2006, the party's general secretary, Mr Klaus Uwe Benneter, said yesterday.
"Our tax plan ... will be developed for the 2006 federal election, and there will be no further discussion and no further decisions on the issue before then," Mr Benneter said after a meeting of the SPD leadership in Berlin.
He added that Finance Minister Mr Hans Eichel was leading a working group that would draw up proposals on changes to Germany's tax rules that would form the basis of the SPD's programme for government after the 2006 election.
Mr Benneter's comments came after an SPD regional finance minister said in a magazine interview on Saturday that the SPD planned to present tax reform plans before the end of this year.
Mr Ralf Stegner, finance minister in the SPD-controlled northern state of Schleswig-Holstein, was part of Mr Eichel's working group, magazine Der Spiegel reported. However, Mr Eichel and SPD chairman Mr Franz Muentefering have ruled out any tax reforms, it added.
The thrust of the proposals would be changes to the corporate tax code, though lower rates would only be possible if the tax base were widened and subsidies were cut, Der Spiegel said.
It added that the working group was also looking at changing rules on capital gains tax, and was discussing a possible maximum 30 per cent uniform levy on interest and dividends.
Top earners currently pay the top income tax rate of 42 per cent on interest and dividends.
The German Chancellor, Mr Gerhard Schröder, said tax reforms proposed by Schleswig-Holstein Premier Ms Heide Simonis, including an increase in VAT and higher levies for top earners, would not come in at the federal level.
