Chancellor Schulz, Economy Minister Haipke from the Green Party, and Finance Minister Linder have all agreed to grant foreign skilled workers tax incentives during the first few years following their entry into Germany. This came during the ongoing negotiations regarding the 2025 budget.
This step aims to attract skilled workers from refugees, however, it is facing sharp criticism from the opposition.
The government has called the tax exemptions for skilled foreign workers the “Growth Initiative”
Skilled workers who have recently immigrated to Germany are entitled to receive a percentage of 10% – 30% of their total wages tax-free for 3 years from the time they join the job. The percentage will be determined according to the upper and lower wage limits, and the government will examine the impact of the initiative after five years.
Heavily criticism is against the initiative, as critics view it dividing workers into classes. Former Federal Minister of Agriculture Julia Klöckner, who is the economic policy spokesperson for the union factions in the Bundestag, was at the forefront of the critics of the initiative.
The Christian Democratic Union politician wrote on the X platform; “This is discrimination against citizens, first and second-class workers, but for everyone who works the following should apply; more network than gross, and the work should be worth it.”
As for Yasmine Fahmy, President of the German Employees Union (DGB), she believes that the tax advantage initiative for skilled foreign workers contains social explosives.
However, despite the objections, the initiative has the support of important ministers in the federal government who view it as crucial for improving the overall employment of refugees.
According to the initiative, skilled foreign workers will obtain work permits more easily, as failure by the immigration authorities and the Federal Employment Agency to respond to the work permit application within two weeks will be considered approval.
According to Federal Minister of Economics Habeck, The aim is to cancel the approval of the immigration authorities. “If the immigration authorities do not object after 14 days, the work of foreigners is considered acceptable,” Habeck said.
Hibeck sees the initiative as an important step towards integrating more refugees and foreigners into the labor market. This integration is an important step towards further growth.
Hibeck also said that he “often meets skilled craftsmen who tell him that they want to employ someone, but they are unable to do so because of bureaucratic obstacles.”
The local politician Hakan Demir from the Social Democratic Party supports the growth initiative, as he believes that it is more than welcome when refugees start working faster.
The initiative comes in the context of the traffic light decision to carry out reforms aimed at benefiting foreign skilled workers. Asylum seekers and tolerated persons are now allowed to work after six months instead of nine months as before.
