10 September 2010 16:05 [Source: ICIS news]
Gerd Romanowski, general manager of the science and technology portfolio at German chemical industry trade group VCI, said it was regrettable that the government would sacrifice tax measures to promote R&D because of the need for budget savings.
The value of fiscal incentive to promote R&D was beyond doubt, he said.
He went on to say that Chancellor Angela Merkel’s Christian Democrat-Liberal government, which took office last September, had noted the importance of R&D in its official coalition agreement.
“We do hope that this [freeze] is not the final word on this file,” Romanowski said.
The plan to freeze R&D tax incentives became clear on Friday when the government responded to an opposition party’s parliamentary request for an answer - a process known as “Grosse Anfrage” in Germany's lower house, the Bundestag, VCI said.
Romanowski said almost all OECD countries used fiscal tax measures to promote R&D. Such measures were an important competitive advantage for producers in those countries.
Last year, Germany-based chemical firms spent over €8bn ($10bn) on the development of new products and processes. About 10% of the industry’s jobs were in R&D laboratories, he said.
Earlier this month, VCI also criticised a government move to cut breaks on eco-energy taxes, warning of a mistake in industrial policy that would threaten the country's future chemical investments.
Frankfurt-based VCI represent some 1,650 Germany-based chemical firms.
($1 = €0.79)
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