Bundestag decides to reduce tax relief for farmers

The Bundestag has approved the controversial reduction in tax relief for agricultural diesel. Parliament passed the budget financing law on Friday, which includes the gradual abolition.

Before it can come into force, the law must pass the Federal Council. However, the state chamber did not agree to shortening the deadline on Friday and did not deal with it. The law will now initially be discussed in specialist committees in the Federal Council. The next regular meeting of the Federal Council is scheduled for March 22nd.

The planned cuts caused a wave of protests from farmers, some of whom marched with their tractors as far as Berlin in front of the Brandenburg Gate.

Federal Council votes on agricultural diesel after Bundestag

The Federal Council does not have to agree to the law, but could object and appeal to the mediation committee. In many countries there are coalition governments with traffic light parties. If a state government disagrees, the state must abstain from the Bundesrat or cannot agree.

The President of the German Farmers’ Association, Joachim Rukwied, said on Thursday: “It is a clear signal that the states are slowing down the federal government’s budget law. Now the time gained must be used sensibly and solutions must be found in the interests of agriculture. The tax increase agricultural diesel must be taken off the table.”

Vehicle tax exemption remains

With the Budget Financing Act, the coalition is implementing austerity measures. According to a budget ruling by the Federal Constitutional Court, billions in holes had to be filled. The government had decided not to abolish the vehicle tax exemption for agriculture as originally planned. At the same time, the coalition of SPD, Greens and FDP agreed that the abolition of the tax relief for agricultural diesel would take place gradually and not suddenly.

So far, companies have been able to get a partial refund of the energy tax for diesel – with a reimbursement of 21.48 cents per liter. This should be reduced gradually. There will no longer be any subsidies for quantities consumed in 2026.

The budget financing law also includes a higher ticket tax on passenger flights. In addition, any tightening of sanctions for citizens’ money is limited to two years. Job centers are allowed to cut off citizen’s benefit for unemployed people for a maximum of two months if those affected repeatedly refuse to accept reasonable jobs. In addition, the citizen’s allowance bonus of 75 euros per month will be abolished – it was introduced for further training that is not aimed at obtaining a professional qualification.