Details on the Tax Reform: Limited Relief Measures in Focus
The tax reform package, containing 34 measures, forecasts an annual relief of approximately 10 billion euros. While the basic allowance increases and the child allowance rises, the stability of the middle-class zone's lower limit suggests a narrowing of tax progressivity.
A new tax reform package provides for a series of adjustments aimed at improving the financial relief for citizens. The package comprises a total of 34 different points and is expected to result in an annual relief of around 10 billion euros. The planned measures include specific adjustments for various income groups.
A central point concerns the basic allowance, which is set to rise to 12,900 euros by 2028. Furthermore, the upper limit for the tax burden is being adjusted: Specifically, the threshold for the highest tax bracket is set to increase from 69,879 euros to 70,600 euros in 2028. Families will also benefit from planned increases, as the child allowance is scheduled to rise from 259 euros per month to 272 euros by 2028.
Nevertheless, there are signs of a narrowing of tax progressivity, as the lower limit of the middle-class zone remains at 17,800 euros, which restricts the general leveling out of the tax rate in certain areas.