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Federal Cabinet approves income tax reform

The federal government has passed an income tax reform aimed at relieving lower incomes.

2 September 2026Tagblick Newsdesk

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Archive photo: Federal Cabinet approves income tax reform — Archive photoPhoto: CDU · Wikimedia Commons · CC BY-SA 3.0 de

The Federal Cabinet has approved the draft for the income tax reform. According to the Federal Ministry of Finance, led by Minister Klingbeil, the plan is to alleviate burdens on incomes from smaller and medium salaries.

Under the plans of the governing coalition, consisting of the Union and SPD, the annual relief volume amounts to ten billion euros. These measures are intended to particularly increase the financial leeway of households earning lower incomes.

The exact design of the tax reform and its specific financial implications have not yet been conclusively discussed. Possible concerns from business associations have been acknowledged, but the precise reactions and discussions are still ongoing.

The approval of the draft marks a crucial step toward implementing the changes in tax law sought by the federal government, which have already received significant attention in public debate.

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