P. M. BRIEFING : Bonn to Rescind Investment Tax
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BONN — West Germany will halt an unpopular tax on investment earnings July 1, just four months after its introduction, Chancellor Helmut Kohl said today.
In a major speech to Parliament on domestic and foreign policy, Kohl said West Germany must tackle increased global competition to maintain its position as a leading exporter.
“It is right that the experience of the last months makes some corrections necessary,” said Kohl. “The withholding tax will be abolished from July 1, 1989.”
The 10% levy, imposed in January and deducted at the earnings source, has prompted many West German investors to shift funds to countries such as Luxembourg, weakening the usually strong mark.
The tax would have earned the state $2.3 billion this year.
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