The German Retail Association (HDE) has expressed strong concern over recent comments by Federal Finance Minister Lars Klingbeil regarding potential tax increases, warning that such measures could undermine economic recovery and consumer confidence in Germany.
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HDE General Manager Stefan Genth criticised the prospect of higher taxes, stating: 'It is incomprehensible that the Federal Finance Minister is now bringing up tax increases. What is needed are lower costs for Germany as a business location. Instead of burdens, there must be relief, both for companies and consumers. Tax increases or even a wealth tax must be off the table.'
Genth emphasised the risks of raising the tax burden at a time when the economic upswing remains fragile: 'An increase in the tax burden runs counter to the goal of a noticeable economic upturn and is a threat to the development of consumer confidence in Germany. A tax increase would massively slow consumption. We cannot afford that.'
Consumer spending has shown signs of stagnation, with improvements in confidence recently halting. 'Dampening consumer confidence with tax increases would be fatal,' Genth added, underlining the delicate balance required to support the retail sector.
The association also warned against introducing a wealth tax, which it says would disproportionately impact medium-sized retailers. 'In retail, private assets are often also corporate assets. A wealth tax would therefore hit medium-sized retailers particularly hard and jeopardize their livelihoods,' Genth said.
HDE called on the federal government to prioritise public spending carefully instead of raising taxes. The association insists that relief for both consumers and businesses is essential to sustain economic growth, maintain jobs, and protect Germany's retail sector during a period of cautious recovery.
The association's warnings come amid ongoing discussions in Berlin about fiscal policy and strategies to close budget gaps, with retail leaders urging policymakers to avoid measures that could slow consumption or threaten the viability of smaller enterprises.
More information:
Handelsverband Deutschland
www.einzelhandel.de
