Growth Opportunities Act: A Partial Success, at least

Opinion Manfred Schlösser, Editor-in-Chief PSI Journal

In their response to the draft bill of the Growth Opportunities Act, German business’s major umbrella organisations pleaded in unison for an equalising of promotional products with other promotional means and for a halt to defining them as gifts. (See my Editorial in the September edition for a detailed account) Had that succeeded, the tiresome obligation to keep records would have fallen away for all time. Yet now, that step forward is not being made in the draft law. In it, on page 23 under item 4, only the upper limit of “gifts” is raised from 35 Euro to 50 Euro. Yes, this is thoroughly respectable progress, for the industry has been demanding this for many years, indeed decades. However, in the legislator’s eyes, the promotional product continues to be a “gift”.

Obligation to keep records remains

That means, unfortunately, that the obligation to keep records above 10 Euro remains in place. That is demonstrably a growth inhibitor – and no growth opportunity – for this extremely effective promotional tool. It is an utmost shame that the act does not live up to its claim on this point. At the same time, explicit reference to the 10-Euro limit was made not only in the umbrella organisations’ response: the urgency was also spelled out in a letter from the BGA chairman Dr. Jandura to Finance Minister Lindner. That correspondence was initiated by Frank Dangmann, while he was still the project manager – that is how we know about it.

Inflation ignored

There was also absolutely no consideration given to the fact that, since 2015, when the 10-Euro limit was defined through a letter from the Federal Ministry of Finance (BMF), inflation has already swallowed up more than 2 Euro. For anything where the expenditure was 9.99 Euro back then, nowadays just under 13 Euro has to be paid – depending on product group, up to 16 Euro. There is, therefore, considerably less return on outlay and there is still the obligation to keep records, while the product value is the same. That is hardly going to encourage the making of sustainable products. If the considerably risen inflation is perpetuated further, in the years to come, with the 10-Euro limit, we will soon be getting close to the “earlier” 5-Euro limit again.

BMF letter

This development was precisely not what the Ministry intended through its letter of 2015, though. There is, therefore, still a chance that this will be realised in the Ministry’s tax department and that this circumstance will be taken into account in a new letter that contains a considerably higher limit. It is a certainty that the PSI and the association GWW will now be taking action in that direction once again, following the draft law. They can be assured of the support of business’s umbrella organisations in that endeavour. As the Growth Opportunities Act progresses through parliament, there will probably still be attempts, from many sides, to turn the gift theme to the industry’s favour in the final metres. The chances of that, though, are not looking very good.

Hope remains

There remains hope of a BMF letter. A further opportunity could also present itself in the government’s plan to cut bureaucracy. There is hope, then. For the time being, we can be glad of a partial success. A partial success that today, unfortunately, is not worth as much as it used to be, because there are considerably fewer promotional products above 10 Euro in deployment. But there will still be many cases where the 35 Euro to 50 Euro success is welcomed. The industry has been fighting for the whole topic for decades, under the motto: little strokes fell big oaks. Thank you to all participants.

Manfred Schlösser  

Photo: © Zerbor – stock.adobe.com