(de-news.net) – Finance Minister Lars Klingbeil (SPD) has submitted a legislative proposal to the Federal Cabinet aimed at delivering targeted tax relief to several sectors, notably agriculture, gastronomy, and transportation. The proposed measures form part of a broader tax adjustment framework and remain subject to approval by both the Bundestag and the Bundesrat.
A central provision of the draft legislation is the restructuring of the commuter allowance. Effective from 2026, the current threshold of 21 kilometres will be abolished in favour of a uniform reimbursement rate of €0.38 per kilometre from the first kilometre travelled. According to estimates provided by the Ministry of Finance, this reform will incur costs of approximately 1.1 billion euros in its initial year, rising to 1.9 billion euros annually from 2027 onwards.
The hospitality sector is set to benefit from a significant reduction in the value-added tax (VAT) on meals, with the rate scheduled to decrease from 19 to 7 percent beginning in 2026. The scope of this measure extends beyond traditional restaurants to include bakeries, butcher shops, grocery retailers, catering providers, and institutional food services such as those in kindergartens, schools, and hospitals. The anticipated fiscal impact of this reform is estimated at 3.6 billion euros per annum. Nonetheless, the breadth and distributive effects of the VAT reduction have prompted critical responses from various stakeholders.
In support of the agricultural sector, the legislation proposes the full reinstatement of the agrardiesel subsidy, intended to mitigate operational expenditures. The Federal Ministry of Agriculture projects an annual cost of 430 million euros for this measure. Further provisions include an increase in tax-exempt allowances for voluntary and instructional activities, thereby benefiting individuals engaged in roles such as choir direction, sports coaching, and unpaid caregiving.
Separately, the Cabinet has resolved to implement a “zero round” for recipients of basic income support (Bürgergeld), maintaining the current monthly rate of 563 euros for single adults throughout 2026. This decision will affect approximately five million beneficiaries.