Federal and state tax revenues increased more significantly last year than experts had expected. They increased by a good seven percent or almost 54 billion to 814.9 billion euros, according to the monthly report by the Federal Ministry of Finance, which will be published on Friday. Experts had expected growth of a good six percent.
In the first half of the year, the development was even better, in the second half of the year the federal government’s aid packages in the wake of the energy crisis after the Russian attack on Ukraine dampened income. In many places there were tax breaks for consumers and companies, most of which were borne by the federal government.
There were noticeable increases in 2022, among other things in sales tax. Catch-up effects after the corona pandemic had an impact here. Wage tax was also above the level of 2021 – thanks to a stable labor market and less short-time work. Revenue from corporate income tax, which largely depends on companies’ profits, also increased noticeably.
The FDP-led Ministry of Finance also announced in the monthly report that it intends to reduce bureaucracy in the tax area. Proposals for this should be presented. The budget for 2024 should again comply with the rules of the debt brake and thus take a step towards normality. “Debt has now become very expensive,” said Florian Toncar, Parliamentary State Secretary in the Ministry of Finance. “The debts that the federal government has inherited are already costing almost 40 billion euros in interest this year.”