Germany is set to double the interest rates charged on unpaid tax liabilities starting in 2027, a measure aimed at accelerating revenue collection and penalizing late payments more severely.
The proposal, outlined in a cabinet draft, also increases the interest paid on tax refunds, creating a symmetrical adjustment to the country's tax administration framework.
Planned expenditures for 2027 are projected to reach €555 billion, significantly outstripping expected revenues.
The policy shift comes as Finance Minister Lars Klingbeil confronts a substantial structural deficit in the federal budget.
Planned expenditures for 2027 are projected to reach €555 billion, significantly outstripping expected revenues.
To bridge this gap, the government is relying on a combination of special funds and new revenue measures, including the proposed hike in tax arrears interest.
This development is part of a broader fiscal tightening strategy that has drawn mixed reactions.