Despite Finance Minister Christian Lindner’s attempts to reframe the proposal as a “recruitment bonus”, the employers’ association has come out against plans to give tax rebates to newcomers in Germany.

Speaking to DPA on Tuesday, Rainer Dulger, the associations’ president, described the proposals as “unjust”.

“The proposal contradicts tax justice and sends the wrong domestic political signal,” he said. “It is also likely to lead to unrest among workers in many places.”

According to Dulger, the government should look at reducing the tax burden for everyone rather than focusing on a certain group of employees.

“Then [Germany] will also be more attractive for foreign skilled workers,” he added.

In Dulger’s view, making conditions better for foreigners also relates to to the ease of living in Germany more generally.

“We have a complicated language,” he said. “When people come to the country, they can’t get childcare, they can’t find a place to live – these are the problems we have to work on.”

As part of its plans for the 2025 budget, Germany’s traffic light coalition has drafted a range of proposed measures designed to boost growth and business morale in the country. 

Among them are proposed tax incentives for foreigners, which would apply for the first three years of employment in Germany.

Incoming workers would receive a 30 percent tax cut in the first year, 20 percent in the second year and 10 percent in the third year. This would be capped at both a lower and an upper limit that have not yet been defined.

Other business leaders have also responded to the plans with muted enthusiasm.

Peter Adrian, president of the German Chamber of Industry and Commerce (DIHK), said he believed it was right to consider how to make Germany more attractive to foreign workers.

Nevertheless, targeting tax concessions at foreigners “would immediately lead to a discussion about unequal treatment,” he explained. 

READ ALSO: Critics slam Germany’s tax rebate plan for foreign workers

How to attract ‘top talent’

The proposals come on the back of a spate of recent changes set out in the government’s skilled immigration law, all designed to plug Germany’s worsening skills gap and support its ailing economy. 

The latest changes include lower salary thresholds for Blue Card applicants, easier family reunification and the introduction of a points-based jobseekers’ visas known as the Opportunity Card. 

Other European countries have also introduced tax incentives to encourage skilled immigration, but this is usually applied only to specific individuals rather than as a blanket policy.  

RED ALSO: Will Germany introduce a tax rebate for foreign skilled workers?

Defending his plans, Finance Minister Lindner (FDP) described the tax incentives as a “recruitment bonus” for attracting “top talent” from abroad. 

However, the economically liberal politician said he was aware of the pushback from employers.

“That is why we will first seek dialogue,” he said. “Because we will not introduce anything that is not actively utilised by employers.”