The Finance Committee

The Finance Committee 2 “The Finance Committee deals with the tax system and seeks to ensure a fair balance between government revenues and the tax burden on the public. It therefore has a major influence on our country’s economic power. In the current electoral term, the taxation of digital business models is an important issue. In addition, the further development of European financial markets regulation is at the centre of the Committee’s work. The aim is to achieve stable financial markets which enable people to accumulate wealth, which supply businesses with the capital they require, and which facilitate innovation.” Bettina Stark-Watzinger, FDP Chairwoman of the Finance Committee 3 The German Bundestag’s decisions are prepared by its committees, which are established at the start of each electoral term. Four of them are stipulated by the Basic Law, the German constitution: the Committee on Foreign Affairs, the Defence Committee, the Committee on the Affairs of the European Union and the Petitions Committee. The Budget Committee and the Committee for the Rules of Procedure are also required by law. The spheres of respon- sibility of the committees essentially reflect the Federal Government’s distribution of ministerial portfolios. This enables Parliament to scrutinise the government’s work effectively. The Bundestag committees The German Bundestag sets political priorities of its own by establishing additional committees for specific subjects, such as sport, cultural affairs or tourism. In addition, special bodies such as parliamentary advisory councils, The committees discuss and committees of inquiry or deliberate on items referred study commissions can also to them by the plenary. They be established. The commit- also have the right to take up tees are composed of mem- issues on their own initiative, bers of all the parliamentary allowing them to set priorities groups, reflecting the balance in the parliamentary debate. of these groups in the German When necessary, they draw Bundestag. The distribution on external expertise – usu- of the chairs and deputy ally by holding public hear- chairs among the parliamen- ings. At the end of a commit- tary groups also reflects their tee’s deliberations, a majority relative strengths in the ple- of its members adopt a recom- nary. In the current electoral mendation for a decision and term, the committees have a report, which serve as the between nine and 49 mem- basis for the plenary’s deci- bers. sion. 5 Whenever money matters are at stake, the Finance Com- mittee has an important role to play. With 41 members, it is one of the “heavyweights” among the Bundestag’s committees. Chaired by Bettina Stark-Watzinger (FDP), it is the lead committee for all items connected with tax policy, the money and capital markets, customs, and other financial policy issues. With the exception of budgetary policy, the Finance Commit- tee therefore oversees all developments within the jurisdiction of the Federal Ministry of Finance. Bills, motions, reports, reso lutions and numerous items from the European Union pile up in the Committee members’ intrays. Their work may sound dry, but all human life is there. Again and again, they discuss tax cuts that will reduce the burden on citizens and businesses, and the tax revenues that enable the state The Finance Committee are made frequently inspire new draft legislation, which is ultimately scrutinised by the Finance Committee. The Com- to meet its obligations. Inter- mittee’s deliberations are usu- national taxation issues, such ally preceded by long public as the fight against base ero- debates. However, the serious sion and profit shifting, are business really starts when a receiving growing attention piece of draft legislation is from the Committee in the era issued as a printed paper and of an ever more global econ- delivered to the Finance Com- omy and the digital revo- mittee. Bills hardly ever leave lution. At the same time, the the Committee unamended. renewal of the financial mar- Experts in financial policy ket architecture launched from all the parliamentary after the 2008 financial crisis groups weigh up the pros and remains on the Committee’s cons of each initiative in their agenda. The continuing devel- party working groups and opment of the European bank- then in the full Committee. ing union is a key element Finally, the Committee in this. Likewise, rules to informs the plenary about the improve investor and con- results of its deliberations in sumer protection in financial the form of a report and rec- services and to promote the ommendation for a decision further integration of capital on the bill, which serves as markets are being initiated at the basis for the vote in the EU level. The suggestions that plenary. 14 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ CDU/CSU 9 ■ ■ ■ ■ ■ ■ ■ ■ ■ SPD 5 ■ ■ ■ ■ ■ AfD 5 ■ ■ ■ ■ ■ FDP 4 ■ ■ ■ ■ The Left Party 4 ■ ■ ■ ■ Alliance 90/The Greens Number of members: 41 Chairwoman: Bettina Stark-Watzinger, FDP Deputy Chairman: Albrecht Glaser, AfD 7 The tax revenue forecasts issued by the Federal Govern- ment appear regularly on the Finance Committee’s sched- ule as well. Twice a year, the The Finance Committee’s Federal Ministry of Finance’s agenda also features many Working Party on Tax Reve- items on which it is asked for nue Forecasting publishes its opinion. When the special- important data about pro- ised committees that deal jected future tax revenues. with environmental, transport This is part of the parliamen- or agricultural policy are tary oversight of financial discussing biofuels, aviation policy, which also includes fuel or agricultural diesel, the briefings the Committee for instance, the Bundestag’s receives from the Federal financial policy specialists are Ministry of Finance about also called upon to consider the meetings of the ECOFIN the tax aspects of the items in Council, where the EU Mem- question. In these cases, the ber States’ economic affairs Finance Committee delivers and finance ministers take its recommendations to the far-reaching decisions on lead committee for each item. behalf of all EU countries. 8 The Committee’s members study documentation inten- Banking regulation, measures sively before deliberating on to prevent the transfer of an item. Above all, however, profits abroad, action against the members of the Commit- money laundering, and tee are given opportunities to Cameroon – the Committee’s make up their own minds at work in practice consultations and public hearings with experts. The experts The creation of a European invited by the Committee are banking union may have little nominated by the parliamen- in common with a bill inten- tary groups, and tend to be ded to regulate the exchange academics, representatives of information in tax matters of interest groups, and trade with Cameroon. Yet both sub- unionists. They comment on jects have appeared on the the subjects of the hearings Finance Committee’s agenda. and help to ensure that the They show the diversity of the consequences a piece of legis- topics considered by the Com- lation will have for all groups mittee. At one meeting, it may in society are made quite find itself looking at the infor- explicit. The Finance Com- mation which financial ser- mittee held 47 public hear- vice providers are required to ings and consultations in the disclose to their customers or last electoral term alone, and action to tackle money laun- is continuing to hold public dering, while at the next it hearings on draft legislation discusses the VAT system or in the current electoral term. the design of inheritance tax. 9 The OECD’s Action Plan on Base Erosion and Profit Shift- ing is giving rise, in several steps, to European directives and regulations, and the Finance Committee engages in intensive discussions on their implementation in German law. The Finance Committee delib- With regard to the regulation erates on important and often of the financial markets, the lengthy regulations and Committee discusses items motions on tax law. These intended to enhance trans- include the “Annual Tax Act” parency and consumer pro bringing together the tax tection, such as the Act to adjustments necessary for Ensure Stable and Fair Benefit each new tax year, or the vari- Payments for Life Insurance ous information exchange Policyholders, the Act Imple- agreements and double taxa- menting the EU Deposit Guar- tion agreements with other antee Schemes Directive or countries. Bills and motions the Retail Investor Protection to amend the VAT Act, the Act. The Committee also deals Corporation Tax Act or the with various bills and motions Income Tax Act feature on the containing important meas- Committee’s agenda, as do ures to stabilise the financial more specific tax regulations sector and to prevent future such as the taxation of sports financial crises, or to at least betting or changes to the ensure that such crises do not Insurance Tax Act or the weigh on the public purse. Motor Vehicle Tax Act. Prominent examples of such 10 The items on financial market regulation, but also motions and bills relating to tax law and other areas such as action against money laundering, measures include the Act show that in the field of finan- Adapting National Bank Reso- cial policy there is a growing lution Law to the Single Reso- interdependence between lution Mechanism and the national legislation in the European Bank Levy Provi- German Bundestag and EU sions (Resolution Mechanism legislation. Many of the bills Act) or the Act Implementing considered by the Finance the EU Directive Establishing Committee deal with the a Framework for the Recovery implementation of EU direc- and Resolution of Credit Insti- tives or regulations. The tutions and Investment Firms members of the Finance Com- (BRRD Implementation Act). mittee therefore hold very In the current electoral term, detailed discussions on indi- the Finance Committee is vidual EU legislative projects once again deliberating on concerning financial policy, motions and bills which aim in order to scrutinise the main to put in place additional lines of European policy in elements of a resilient and this area and to help shape it, consumerfriendly financial where appropriate, by provid- system.

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