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Report: Germany mulls corporate tax cut as recession fears mount

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Report: Germany mulls corporate tax cut as recession fears mount

Germany's economic minister proposed to reduce the corporate tax rate, hoping it would help small and medium-sized enterprises and stimulate Europe's largest economy, Bloomberg News reported.

Peter Altmaier recommended capping the tax rate at 25%. SMEs account for more than half of Germany's economic output and almost 60% of jobs, according to the Federal Ministry for Economic Affairs and Energy.

Germany's overall corporate tax burden ranges from 30% to 33%, Bloomberg reported, citing Deloitte data. The proposed measures include eliminating a tax on reunification projects over time.

Altmaier wants to cap the tax rate for personal-liability companies at 45% and lower social costs to less than 40% by cutting levies for unemployment benefits.

The plan is subject to German Chancellor Angela Merkel junior partner the Social Democrats' approval.

The proposal comes amid fears that Germany could slip into a technical recession in the third quarter, following a contraction in the prior three-month period.

Earlier in the month, Germany's government was said to be preparing a stimulus plan to boost the domestic economy and consumer spending and prevent large-scale unemployment in the case of a deep recession.