German Crafts Sector Demands Lower Social Security Contributions in New Reform Push

Germany's powerful craft sector is demanding further government action to reduce the financial pressure on businesses. Jörg Dittrich, president of the Central Association of the German Craft Trades (ZDH), has called for a second reform package this autumn, specifically targeting a reduction in social security contributions.

Dittrich emphasized that while the initial reform package needs to be implemented, a subsequent one must follow to bring the supplementary labor costs back "towards 40 percent." He argued that the planned pension reform, though necessary, should not distract from the broader need to decrease the overall tax and contribution burden. Specifically, he proposed offsetting the anticipated rise in pension contributions in 2028 by lowering health and long-term care insurance contributions.

Beyond social security, Dittrich also highlighted the need to support partnerships, a common business structure in Germany where partners are often personally liable. He criticized the current system, stating that these "people's companies" are disadvantaged compared to corporations. "Stronger shoulders should gladly carry more, but partnerships must not be disadvantaged compared to capital companies, and that is currently the case," Dittrich asserted.

Meanwhile, opposition parties are also advocating for tax relief. Dietmar Bartsch of The Left party called for a reduction in social contributions to benefit low-wage earners who may not profit from current tax cuts due to their low income. The ruling coalition parties, the CDU and SPD, have indicated their intention to implement the pension commission's reform plans swiftly and comprehensively.