The BDI has thoroughly analyzed and evaluated the tax and fiscal policy provisions in the election platforms of the CDU/CSU, SPD, Alliance 90/The Greens, and FDP. The BDI’s cross-departmental policy paper on the 2025 federal election can be found here. The increasingly entrenched weakness in economic growth is reflected in many ways in the election platforms: All four platforms examined contain tax measures designed to stimulate investment in Germany. At the same time, however, some also propose tax increases or even the reintroduction of the wealth tax—both of which are measures that are detrimental to growth. The BDI therefore firmly rejects additional tax burdens on the economy.

By no means will all campaign promises be feasible or financially viable. The IW Cologne had already made this clear in December 2024 with an analysis of the parties’ plans for tax cuts and tax increases. It is therefore crucial to identify clear priorities. How can Germany remain a successful industrial location, and how can companies based here remain internationally competitive?

Growth-Promoting Corporate Tax Reform

From the BDI’s perspective, a growth-promoting reform of corporate taxes must take precedence over consumption-oriented sales tax relief. Only through bold and far-reaching structural reforms will it be possible to make Germany’s tax framework attractive again and put the country back on the path to growth. The goal must be to reduce the tax burden on businesses from the current level of around 30 percent to an internationally competitive level of no more than 25 percent. The nominal average tax burden on corporations in the EU is only about 21 percent, and in the OECD, it is only 23 percent. In addition to the level of the tax burden on businesses and employees, there is a significant need for improvement in many areas of tax law in order to remove existing obstacles for businesses.

Drastic Reduction of Red Tape in Tax Law

A decisive step is a sweeping reduction of bureaucracy in tax law. Tax procedures must become simpler and more efficient so that they can be managed with fewer resources. Digitization and the use of AI in tax procedures are key contributors to this. However, the next federal government must also advocate at the EU level for the reduction of tax bureaucracy in order to curb the ever-expanding European compliance obligations (“tax decluttering”). This includes simplifying the highly complex calculation of the minimum tax and facilitating cross-border remote work to counteract the shortage of skilled workers in Germany.

A Paradigm Shift in Tax Policy Is Necessary

In the area of tax legislation, a paradigm shift is now needed toward a tax policy that strengthens Germany as a business location. To achieve this, in addition to consistently reducing bureaucracy in all tax laws and administrative measures, a genuine cultural shift toward a business-friendly tax policy must take place. Investments and innovations in Germany must be supported, and the measures proposed by the independent expert commissions of the Federal Ministry of Finance should be implemented promptly.