The German Free Democratic Party (FDP) has withdrawn its support for a proposed tax relief bill aimed at addressing "cold progression" in taxation.

FDP leader Christian Lindner announced that the party could no longer accept the compromises included in the bill, which was part of the coalition government's agenda.

This decision comes as a setback for Chancellor Olaf Scholz's government, which is now struggling to pass the bill before the upcoming Bundestag elections.

The bill intended to prevent taxpayers from paying more taxes due to inflation-adjusted salary increases.

With the FDP and the Union both withholding support, the bill is unlikely to pass before the elections, leaving its future uncertain.