Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Pfizer/BioNTech tax windfall brings Mainz an early Christmas present

Pfizer/BioNTech tax windfall brings Mainz an early Christmas present

German city where early Covid vaccine was developed uses its new-found wealth to slash debt and attract other biotech firms

The Pfizer/BioNTech jab is having an unexpected side-effect on the German municipality where scientists first developed it: for the first time in three decades the city of Mainz expects to become debt-free thanks to the tax revenues generated by the company’s global success.

Mainz’s decision to use its financial windfall to also slash corporate tax rates in the hope of attracting industry, especially biotech companies, however, is drawing criticism from neighbouring cities and economists.

The city of about 217,000 inhabitants in the western state of Rhineland-Palatinate, has been carrying a crippling debt burden since the early 90s when authorities took out a loan that grew to €1.3bn (£1.1bn). Over the first year of the pandemic, the Rhine river city’s debt pile accrued a further €30m in interest alone.

But the success of BioNTech, whose founders Uğur Şahin and ‎Özlem Türeci worked with the pharmaceutical giant Pfizer for trials and manufacturing of their Comirnaty vaccine in 2020, has transformed Mainz’s fortunes.

The costumed and masked statue of Johannes Gutenberg in Mainz city centre.


Instead of an expected 2021 budgetary overspend of €36m, the city senate this winter announced a budget surplus of €1.09bn. With another surplus of €490.8m expected in 2022, Mainz hopes to clear its remaining debt within a year.

Owing to German tax secrecy laws, BioNTech has not been officially named as the source of what Mainz’s senate calls the city’s “Cinderella story”. But the handsome wealth of the company that created the first vaccine authorised in the west is no secret. In January-September 2021, BioNTech made €10.3bn in pre-tax profits, of which it paid €3.2bn in tax – though the company has several sites in Germany and has not said to which municipalities the money went.

Before the Covid-19 pandemic, Mainz’s main gift to the world was the printing press, whose inventor, Johannes Gutenberg, developed a method of printing from movable type in the city in about 1440.

Mainz’s mayor, Michael Ebling, said the game-changing development of BioNTech’s mRNA vaccine was of equally outstanding importance. He told the Guardian he wanted to use the tax money to settle his city’s debts, rather than invest in spectacular infrastructure projects. “Christmas may be upon us, but for the city of Mainz now is not the time to draw up long wishlists,” Ebling said. “The tax windfall will certainly make it easier to honour the other achievements that our city has given to the world.”

As well as promoting Mainz’s role in the printing revolution, the mayor said he would nourish its reputation as an innovator in football: the Liverpool coach Jürgen Klopp and Chelsea’s Thomas Tuchel first made their names managing the local Bundesliga club Mainz 05. “We can renovate the Gutenberg museum of printing, and our football pitches will remain in such a state that every player can play a clean pass,” he said.

A Mainz 05 fan at a Bundesliga match on 14 December. The club will benefit from the city’s BioNTech windfall.


Ebling’s biggest plan, however, is to build on the vaccine makers’ success and turn Mainz into a global biotech hub: a 12-hectare (30-acre) plot near BioNTech’s headquarters, the university clinic and the German Cancer Research Centre has been earmarked for development.

Over the next 10 years, the city hopes to create 5,000 new jobs, in part by luring companies through much lower corporate tax rates, which German municipalities are able to set themselves on top of the federal corporate tax rate of 3.5%. Mainz plans to cut its corporate tax rate from 440 to 310 percentage points, by far the lowest among German cities with more than 50,000 inhabitants.

The senate says the cut is a gift not only to science startups looking for a new home, but to smaller companies that have suffered in the pandemic. A spokesperson denied the reduced tax rate was designed to stop BioNTech relocating to other low-tax regions.

But in Wiesbaden, notionally Mainz’s richer brother across the Rhine, local politicians have criticised Mainz as “extremely lacking in solidarity”, while economists predicted the move could trigger a race to the bottom among German cities.

“It’s understandable that Mainz has lowered the tax rate, but I would share local politicians’ criticism of the extent to which they are slashing the rate,” said René Geissler, a professor of public management at the Technical University of Applied Sciences in Wildau. “It’s a bit of a bombshell.”

“It will create enormous pressure on other cities to follow suit,” he added, questioning whether the plan would necessarily pay dividends. For startups, he said, a low tax rate was often far less important when choosing their headquarters than proximity to research institutions or companies working in the same field, conditions Mainz already offers.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Munich Airport Reopens After Second Drone Shutdown
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
×