Estimate: German tax revenues lower than expected in 2025
Published: Thursday, Oct 24th 2024, 15:30
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According to tax estimates, the federal, state and local governments in Germany will have to make do with 12.7 billion euros less tax revenue in the coming year than was assumed in the spring.
For the period up to 2028, the estimates also predicted a shortfall in revenue of 58.1 billion euros, according to the Ministry of Finance.
For the state as a whole, i.e. the federal government, federal states and municipalities combined, the estimates predict tax revenues of 982.4 billion euros for 2025. This is 12.7 billion euros more pessimistic than in May.
The current year also looks bleak with a minus of 8.7 billion euros. Estimators are now expecting 58.1 billion euros less tax revenue by 2028 than in the spring.
For the federal government alone, estimators are expecting a mini-plus of 0.7 billion - but this is mainly due to changes in transfers to the EU. Compared to the spring forecast, on which Lindner's draft budget is based, this hardly provides any new leeway. "On the contrary: we will have to consolidate further. Not every government service will still be possible," explained the FDP leader at the presentation of the figures in Washington. "We need economic growth."
The unfinished federal budget
The "traffic light" government (SPD, FDP, Greens) plans to spend almost 490 billion euros next year, more than a tenth of this on credit. This is permitted by the so-called debt brake. However, the opposition, the Court of Auditors, the Bundesbank and economists still consider the figures put forward by Finance Minister Christian Lindner to be more or less dubious or unrealistic.
The FDP leader gave MPs a difficult task, as he was unable to agree with Chancellor Olaf Scholz (SPD) and Vice-Chancellor Robert Habeck (Greens) on where money should be saved until the very end. As a result, there was a funding gap of two to three billion when the draft went to the Bundestag.
The staggering economy
One of the main reasons for the results of the tax estimate is the German government's meagre expectations for economic development. "The challenges are greater than we have perhaps acknowledged in recent years," stated Economics Minister Habeck recently.
He has just announced the second recession in a row for 2024. Economic output is shrinking, partly because companies and private individuals are holding back on investments due to the geopolitical situation. Habeck also conceded that disputes within the coalition were contributing to the uncertainty.
©Keystone/SDA
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