According to an insider, Federal Finance Minister Christian Lindner (FDP) wants to make larger portions of income tax-free in 2023 than before.
The basic allowance for income tax should therefore increase by 561 euros to 10,908 euros, the child allowance will be increased by 404 euros to 6024 euros.
The “Bild” newspaper first reported on the planning.
"If the standard rate of citizen income increases in January, then the basic allowance for wage tax must also increase," Lindner told the newspaper.
"Beneficiaries and working taxpayers alike deserve fairness."
The higher allowances are to be adjusted as part of the parliamentary procedure for the Inflation Compensation Act, as the insider said.
Lindner had recently always emphasized that some of the specifications are provisional.
The FDP boss wanted to wait for a new expert report on the necessary subsistence level, which should be available in the next few days or weeks.
The so-called cold progression is to be combated with the Inflation Compensation Act.
This occurs when the tax system is not adjusted to inflation.
Because of the progressive tax rate, taxpayers can then be subjected to higher deductions, even if they no longer have any real income.
This is now to be adjusted for 2023 and 2024.