Germany approves corporate tax cuts of 32 bil. euros

Germany has announced corporate tax cuts worth 32 billion euros, or about 35 billion dollars, over four years in a bid to shore up its ailing economy.

The administration of German Chancellor Olaf Scholz reached the agreement on Wednesday at a cabinet meeting in the eastern state of Brandenburg.

The decision is an apparent response to growing calls for the government to take the necessary steps to boost its flagging economy.

The German economy has stagnated due to slowing consumption as the country suffers from surging energy prices caused by Russia's invasion of Ukraine.

The stimulus measures center on corporate tax cuts of about 7 billion euros, or around 7.7 billion dollars, per year, which mainly target small and medium-sized companies. The government says the total amount is expected to reach 32 billion euros in the period from 2024 to 2028.

Scholz told reporters that the tax cuts are intended to stimulate growth and make sure companies invest in Germany.

The International Monetary Fund predicted a decline in German economic output of 0.1 percent for 2023. Germany is the only major economy with a negative growth forecast for this year.