Analyses of legislative proposals

This analysis provides an overview of the budget-related measures contained in the 2027‑2028 Budget Accompanying Act. These include the new consolidation and growth-promoting measures presented as part of the 2027 and 2028 budgets. The measures improve the general government balance in 2027 by 1.9 billion Euros. In 2028 and 2029, the net contribution to fiscal consolidation rises to 2.2 billion euros before declining from 2030 onward, primarily due to the expiry of temporary measures. Just under two-thirds of the total volume is attributable to revenue-side measures. In addition to the federal government, the measures also have budgetary implications for the federal provinces, municipalities, and social security funds.

The analysis is available only in German.

The government bill provides for several tax measures, a reduction in the transport allowance for federal employees, and a reduction in remuneration for work performed by prisoners. The tax measures include a tax-free employee bonus of up to 500 euros in 2026, stricter rules on exit taxation, and expanded access to information under the Accounts Register and Accounts Inspection Act. According to the regulatory impact assessments, these measures are expected to result in budgetary costs of 62 million euros in 2026. From 2027 onward, they are expected to contribute to fiscal consolidation, with contributions of 36 million euros in 2027 and 41 million euros per year starting in 2028.

The analysis is available only in German.

The value-added tax (VAT) rate on selected food items is set to be reduced to 4.9 % effective 1 July 2026. This is expected to reduce tax revenue by approximately 400 million euros per year. At the time this analysis was prepared, no details were available regarding the announced measures to offset the revenue loss, so these were not taken into account. If the VAT reduction is fully passed on to consumers, this would lower the inflation rate by about 0.15 percentage points. The measure has a progressive effect because low-income households spend a higher proportion of their income on food. However, households in the upper income deciles spend more on food in absolute terms. As a result, the share of total relief increases with income, from 8.6 % in the first decile to 11.8 % in the tenth decile.

The analysis is available only in German.

Since the start of the war in Iran, diesel and petrol prices have risen sharply. The National Council has established a legal basis for measures to curb fuel prices. An amendment to the Price Act authorised the federal government to issue regulations limiting profit margins on diesel and petrol. An amendment to the Mineral Oil Tax Act authorised the Federal Minister of Finance to reduce mineral oil tax rates. At the time of this analysis, the relevant regulations had not yet been issued. A reduction in fuel prices of 10 cents per litre would lower the inflation rate by about 0.2 percentage points. The measures are expected to be largely budget-neutral.

The analysis is available only in German.