According to the May tax estimate, the tax authorities in Bavaria can expect at least a slight increase in tax revenue in the coming years. “The regionalization of the tax estimate results means a minimal increase of around 0.4 billion euros for Bavaria in 2023 compared to the annual budget for 2023 – i.e. a sideways movement,” said Finance Minister Albert Füracker (CSU) in Munich. A similar “minimal positive sideways movement” is also emerging for 2024 and 2025, with an increase of around 600 million euros in each case compared to the previous financial planning.
Despite the slightly improved forecast, Füracker warned of many uncertainties for the state budget: “The current economic situation is still extremely volatile and uncertain.” In addition, the money is not yet in the account. “The actual tax revenues in 2023 are still slightly below expectations.” Furthermore, the state currently has “high, incalculable, inflation-related additional expenditure, for example in state construction measures and in energy and management costs”.
Ultimately, the tax estimate is only a forecast – the actual tax revenue will only be clear at the end of the year, Füracker continues. In addition, there are enormous uncertainties due to the ongoing war in Europe and the energy crisis. “At the same time, from 2024 onwards, in addition to the repayment of the corona debt, the results of the collective bargaining negotiations in the federal states must also be taken into account. The coming years will also be challenging for the Free State.” For the current financial year, however, the forecast shows that the budget plan is “calculated and decided on rock solid”.
The May tax estimate is based on the macroeconomic key data from the federal government’s spring projection, according to which slight real economic growth of 0.4 percent in the current year and 1.6 percent in the coming year can be expected. The result of the May tax estimate is the basis for the first negotiations to draw up the planned state budget for 2024/2025.
Federal Finance Minister Christian Linder (FDP) had already presented the tax estimate for the federal, state and local governments on Thursday. According to this, 30.8 billion euros less will flow into the coffers in the coming year than calculated in the autumn 2022 estimate. Overall, they expect revenues of 962.2 billion euros for 2024. The main reason for the minus is the adjustment for inflation in income tax, which was decided according to the last estimate.
According to Füracker, the obvious difference between the minimal additional revenue in Bavaria and the blatant minus at the federal level results from a different calculation in the tax estimate in November 2022. At that time, the federal government still calculated without the budgetary effects of legislative changes that have now come into force, such as inflation compensation. In contrast, these were already taken into account in Bavaria.
The tax assessment working group meets twice a year, in May and in autumn. The committee consists of experts from the Federal Government, the leading economic research institutes, the Federal Statistical Office, the Bundesbank, the Council of Experts for the Assessment of Macroeconomic Development in Germany as well as representatives of the state finance ministries and the municipalities.