German Finance Minister Christian Lindner has proposed a significant tax reform, aiming to abolish tax classes III and V by 2030. This change, part of the 'Second Annual Tax Act,' is designed to promote women's employment and ensure fairer tax distribution among couples.

The current system, which allows high earners to minimize tax deductions while their partners face higher cuts, will be replaced by the 'factor method' in tax class IV.

This reform has sparked debate, with Family Minister Lisa Paus viewing it as a step towards eliminating the controversial 'spouse splitting' tax model.

However, Lindner firmly denies any plans to abolish spouse splitting, emphasizing that the tax class reform is an alternative to its elimination.