In response to persistently high energy prices, the German government is firming up plans for tax relief measures. According to a report in Bild newspaper on Thursday, Chancellor Friedrich Merz (CDU) is open to increasing the commuter allowance from the current 38 cents to up to 45 cents per kilometer. He is also in favor of lowering the electricity tax. However, the considerations regarding the commuter allowance have met with criticism from coalition partner SPD.
An increase in the commuter allowance would only reach citizens next year through their tax returns. People with low incomes who pay little or no taxes would benefit less from it than higher earners.
"The commuter allowance would only provide relief with a time delay and moreover only to a very limited extent," said SPD parliamentary manager Dirk Wiese to the Rheinische Post. Therefore, it would be more sensible to "introduce a fuel price cap alongside an excess profits tax for energy companies."
Such a price cap would be an effective instrument "to provide clear relief to citizens promptly," Wiese explained. However, the SPD politician emphasized that it is "fundamentally welcome that our coalition partner now also recognizes that further relief measures are urgently needed."
CSU parliamentary group leader Alexander Hoffmann wrote on the messaging service X that for the coalition, "all instruments for price dampening remain on the table." The situation on energy markets is likely to remain tense, and it is too early to sound the all-clear.
The workers' wing of the Union also expressed dissatisfaction with raising the commuter allowance. "People need relief now - not first with their next tax return in over a year," said Dennis Radtke, head of the Christian Democratic Employees' Association (CDA), to the Rheinische Post. Radtke called for, among other things, "direct mobility payments for employees with low incomes" as well as reducing VAT on basic foodstuffs to zero.
However, the CDA chief welcomed the considerations regarding electricity tax - a reduction is "long overdue," he said. "It provides broader and fairer relief to employees, families and businesses than many other individual measures."
Initial decisions could possibly be made over the weekend. According to reports, there are considerations within the coalition for a meeting of the coalition committee. Bild newspaper named Sunday as the date.
In the opposition, the Left party also complained that relief via the commuter allowance would not provide immediate help. Moreover, the allowance is socially unjust, explained Christian Görke, the Left parliamentary group's finance expert. "The nursing assistant in the hospital who pays no or only minimal taxes receives much less for the same commute than the senior physician - or nothing at all." Görke called for 150 euros in crisis energy payments for everyone.
The AfD also criticized the considerations regarding the commuter allowance. Party leader Alice Weidel called for an immediate reduction in energy and VAT taxes and an end to CO2 pricing. BSW leader Fabio De Masi demanded similar measures: "Energy tax must be lowered, CO2 levy abolished, and VAT reduced."
Marcel Fratzscher, President of the German Institute for Economic Research (DIW), also expressed criticism of a possible increase in the commuter allowance. "Increasing the commuter allowance would be an inefficient and expensive instrument that is likely to further exacerbate social inequalities," he told the Rheinische Post. For most people, "high and rising food prices" are more important than fuel prices.
The German Environmental Aid (DUH) criticized raising the commuter allowance as a "tax gift for higher earners." A higher commuter allowance subsidizes "showing off against climate protection with gas-guzzling vehicles even further," explained DUH managing director Jürgen Resch. He proposed a speed limit on German roads: This alone could save up to 4.7 billion liters of fuel - falling demand would cause fuel prices to drop.
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