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The German city reaps taxes based on BioNTech’s Covid vaccine success

When residents of Mainz gathered in late November for their first glass of sparkling wine in Schillerplatz, downtown Germany, officials from nearby City Hall realized they had a greater reason for the Christmas festivities.

The former Roman fort on the Rhine has benefited from a multi-billion euro tax, largely due to BioNTech, a Covid-19 vaccine manufacturer established in the city in 2008.

“During the epidemic, Mainz became a global marketplace,” said Mayor Michael Ebling, who pledged to use BioNTech funds to fight coronavirus to end the city’s debt.

Corporate taxes – some of which could be imposed by German authorities – were also cut to attract more natural science businesses.

More than 2bn dosage of BioNTech / Pfizer vaccine has been approved so far, and BioNTech is on track to deliver more than € 10bn in profits by 2021. For nine months until the end of September, the company, which is based in the US and other US cities Germany as Marburg, paid more than € 3bn in taxes.

Officials have not publicly confirmed the amount of tax BioNTech paid in Mainz a few months ago. But the company, unknown to most of the city’s 220,000 people prior to the epidemic, almost lifted the Mainz tax with one hand from € 173m in 2020 to $ 1 billion in 2021, according to a number of people familiar with the matter. .

BioNTech’s HQ is aptly named ‘On Goldmine’, a road known to Roman archeology © Abdulhamid / Hosbas / Anadolu Agency / Getty.

Popularly known as Gutenberg’s printing press in the 16th century, Mainz has long been at odds with neighboring Frankfurt, Germany’s economic capital. But unlike the city of Sindelfingen, in southwestern Germany, where the Mercedes-Benz factory, which used the latest taxes to establish marble zebra crossings, Mainz is less expensive.

“Our priority is to get rid of our financial debt [short-term loans] of € 634m by the end of 2022, “Treasurer Günter Beck told the Financial Times.

German cities that are in debt to receive this loan only spend “unavoidable” money.

The Rhineland-Palatinate region, with Mainz and its capital, had the lowest personal debt in 2020, according to statistics from the Bundesbank. The same city has been enrolled in the loan program for almost a decade.

Currently, Mainz will have a surplus of approximately € 1.1bn in 2021, with authorities expecting to raise more than € 490m next year.

As his debts are about to be repaid, Ebling, of the Social Democrats, wants to expand the city’s opportunities to reduce its reliance on one company.

“Now we will use our good money and the money we have earned to establish a scientific center around the world,” he said, pledging to support the transformation of a 12-hectare cottage near the BioNTech headquarters into a business and cultural center. About 5,000 jobs will be created during this period, the mayor added.

There should be no shortage of tenants. Thanks to BioNTech, companies from Germany and beyond have asked to move to the city, according to officials.

“All of a sudden, we are known in Singapore,” said Günter Jertz, chief of business unit in Rheinhessen province, which includes Mainz. For a city that loves to make headlines at its annual games, BioNTech’s scientific and commercial success, he added, is “a valuable marketing initiative”.

Mainz is also releasing a red carpet. With the money in place, the city next year will reduce corporate taxes by about one-third, which will save companies beyond € 350m by 2022, according to the mayor.

The descent brings Mainz to alliance with neighboring Ingelheim – home to Germany’s second largest pharmaceutical company, Boehringer Ingelheim – making the city a much cheaper place to do business than its neighbors Wiesbaden or Frankfurt, both in Hesse state.

The decision was taken “because we want to give something back to those who invest in Mainz,” Beck said.

Does it mean BioNTech, and did the vaccine maker want to reduce it? “No,” insisted Beck, “not by nature.”

The Mainz business district, where the population is declining during the epidemic, needs more money. The city also has a small residential area and schools for school children.

But few opposed City Hall’s priorities. “It is very important for us to invest in business development and biotech production facilities,” said Peter Hähner, banker and President of the Rheinhessen chambers of Commerce. “Circular paths [can] come after him. ”

In addition, he said, “there may be a risk if we do not agree with BioNTech, that they. . . go elsewhere ”.

There are no indications that the company, which was established at Johannes Gutenberg University, was founded Ugur Sahin and Ozlem Turici was researching cancer, leaving the city.

BioNTech founder Ugur Sahin and Ozlem Tureci at the awards ceremony in Mainz in November

BioNTech founders Ugur Sahin and Ozlem Tureci at the awards ceremony in Mainz in November © Abdulhamid Hosbas / Anadolu Agency / Getty

Last month, the company announced it would spend more than € 1bn on expanding its headquarters, located at “At the Goldmine,” a road known to Roman archaeologists. It will also build 10 pages across Mainz and employ thousands of jobs in the coming years, Sahin said.

Several companies in the region have also benefited from the sale of Covid vaccine, including Merck of Germany, which manufactures BioNTech / Pfizer lipid nanoparticles, and vendors such as vial Schott.

Beck, who represents Green’s party, is confident that such newcomers will keep Mainz afloat. Even if they damage other cities, they are more taxed.

“There was talk [in the newspaper] to say that Wiesbaden is jealous, and that Mainz is not showing solidarity, ”he said. “Well, Wiesbaden has been rich for many years and Mainz was poor. There was no connection from Wiesbaden to Mainz.”

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