The working group of tax assessors has presented its forecast for the years up to 2026. Key message: Despite the forecast economic downturn, the federal, state and local governments will take in significantly more money. To be more precise: by 2026 126.4 billion euros more flow into the state coffers. The state benefits above all from the high inflation: if goods become more expensive, the income from the taxes that have to be paid on them also increases. In particular, VAT brings in significantly more.
This year, however, tax revenue is expected to be 1.7 billion euros lower than predicted. “The current estimates are characterized by a high degree of uncertainty,” said Finance Minister Christian Linder (FDP). The risks for economic development are great, especially with regard to possible bottlenecks in the energy supply in the coming months. Lindner plans to fully comply with the debt brake suspended due to the corona pandemic again in 2023.
The tax experts expect additional income of 8.9 billion euros for 2023. That would Record revenue of 937.3 billion euros mean. However, the Minister of Finance is unlikely to be able to make any big leaps, because in the coming year relief may again be necessary due to the high prices for the citizens. Lindner said: “But it is also clear that there is no scope for additional expenditure.”
In the first nine months of 2022, tax revenue flowed surprisingly well. From January to September, around ten percent more taxes came in than in the same period last year – again mainly due to value added tax. For the coming year, the federal government expects economic output to shrink by 0.4 percent due to the energy crisis.
The high prices, especially for gas, are a burden for many companies and, according to forecasts, will slow down industrial production. At the same time, it is expected that many citizens will restrict themselves and reduce their private consumption. The Ministry of Economic Affairs already sees signs of a clear recovery for 2024. An increase in economic output of 2.3 percent is predicted. However, the situation is volatile, i.e. it fluctuates greatly – both the development of the Russian war of aggression against Ukraine and that of the corona pandemic are difficult to predict.
Stefan Körzell, board member of the German Trade Union Confederation (DGB), demands that the additional revenue from taxes should therefore be used primarily to cushion the consequences of the crisis for people on low incomes, students and pensioners. In addition, investments must be made in an independent supply of renewable energies, in education, health and in socio-ecological transformation. To do this, however, the state must put its finances on a more stable footing in the long term. The DGB is therefore calling for a wealth tax and fewer exemptions for rich corporate heirs from inheritance tax.
The tax assessment working group meets twice a year, in spring and 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.