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Germany's CDU Divided Over Leniency Granted To 'Repentant' Tax Evaders

Thursday, February 25, 2010

Within the ranks of Germany’s Christian Democratic Union (CDU) party, there are growing calls for tougher sanctions to be taken against “repentant” tax evaders.

Saarland’s Prime Minister Peter Müller (CDU) has called for an end to the controversial provision, granting leniency to tax evaders who declare themselves voluntarily to the German tax authorities, calling for the “consistent” prosecution of tax evaders.

Referring to tax evasion as a “social parasitism,” Müller announced that tax evaders should no longer be allowed to go unpunished. According to Müller, anyone who has committed an injustice must be held accountable, irrespective of the nature of the crime, and indeed irrespective of whether or not the injustice is perpetrated by the rich or by the poor.

Echoing Müller’s views, Baden-Württemberg’s Finance Minister Willi Stächele has urged the government to conduct a thorough review of the provision. Leader of the Social Democrats (SPD) Sigmar Gabriel has also demanded that the provision, granting leniency to tax criminals who declare themselves voluntarily, is abolished. According to Gabriel, tax evasion over and above a threshold of EUR500,000 should be considered a crime.

Under current law, tax evaders who provide a self-declaration to the German tax authorities are protected from criminal prosecution, provided that the authorities have not yet launched an investigation.

Despite increasing calls for its abolition, Germany’s Finance Minister Wolfgang Schäuble is standing firm, determined to maintain the controversial provision, which ultimately generates additional income for the state.