The Ampel government in Germany plans to offer tax incentives to foreign skilled workers to address the shortage of qualified labor.

Recruiting foreign skilled workers is seen as necessary due to a shortage of about 573,000 qualified workers in the German economy.

Around 70,000 non-EU workers could benefit from these tax incentives, aimed at attracting skilled workers who are granted residence permits for work purposes.

The tax reductions would apply to non-EU workers for the first three years of their stay, with decreasing percentages of tax exemption each year.

Economists warn that tax relief may not effectively combat the shortage of skilled workers and could disadvantage domestic employees.

The IW suggests that simplifying bureaucracy and streamlining visa processes would be more effective than tax rebates.

Criticism of the plans comes from both the government and business representatives like Employer President Dulger and Industry President Russwurm.

Labor Minister Heil and opposition politicians criticize the tax idea in addition to employer concerns.

The German Chamber of Industry and Commerce expresses caution about the tax incentives and warns against discussions of inequality with German colleagues.

Lindner intends to engage in discussions with employers as they have cautiously welcomed the proposal, emphasizing that the incentives should only apply to top talents.

The Federal Government plans tax incentives for foreign skilled workers to make Germany more attractive, with differing views on the proposal's fairness and effectiveness.