German coalition divided over tax plans ahead of budget talks

Germany’s governing coalition is negotiating several tax plans ahead of budget talks on November 12, 2026. The Union bloc opposes a proposed tax on plastic packaging that was meant to raise more than €1 billion a year from 2028.

The bloc also wants to delay the proposed sugar tax until January 1, 2028. Chancellor Friedrich Merz wants to cut electricity tax for everyone, a move that would cost the federal government about €5 billion a year and save households an average of €5 to €10 a month.