As Germany approaches its next federal election, political parties are making tax relief promises to ease the financial burden on citizens.

Finance Minister Christian Lindner of the FDP has proposed increasing the basic tax-free allowance to €12,096 in 2025 and €12,348 in 2026, slightly higher than initially planned.

This adjustment aims to counteract the effects of inflation and cold progression, where wage increases lead to higher tax rates without real income growth.

The SPD, meanwhile, is promising broader tax reforms to benefit 95% of citizens.

Despite the ongoing budget crisis, the government plans to implement these changes, resulting in an additional €200 million in tax relief for 2025. The adjustments are part of a broader strategy to ensure fairness and support the working population, with Lindner emphasizing the importance of distinguishing between work income and social benefits.