Bavaria's Söder pushes for permanent electricity tax cuts for all Germans
Bavarian premier Markus Söder has called for a permanent reduction in Germany's electricity tax for all citizens. His push comes as the government debates extending tax relief, originally planned for businesses, to households as well. Söder argues that savings from EU welfare fraud could instead ease financial pressure on working people.
The debate over electricity tax cuts began during the 2022/23 energy crisis, when temporary measures like reduced VAT on gas were introduced. Later, the coalition government under Chancellor Friedrich Merz and Finance Minister Lars Klingbeil agreed to lower the tax for manufacturing and agriculture to the EU minimum of 0.05 ct/kWh from January 2026. Now, pressure from the EU Commission in March 2026 seeks to extend this reduction to households, cutting rates from 2.05 ct/kWh to 0.1 ct/kWh.
Söder insists the promised tax cut must apply to everyone, not just businesses. He has criticised spending on EU welfare fraud as wasteful, suggesting those funds could instead support hardworking citizens. His proposal builds on existing grid fee reductions, which he wants to expand further. For years, groups like the FDP and the Handelsverband Deutschland (HDE) have pushed for broader energy price relief. The coalition's earlier agreement already included plans for lower taxes for all firms and households. Söder is now actively lobbying within the coalition to make this extension a reality.
The outcome of these discussions will determine whether households see a permanent drop in electricity costs. If approved, the tax cut would align with long-standing demands from businesses and consumer groups. Söder's focus remains on redirecting funds to reduce financial strain on ordinary citizens.
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