Germany Announces Further Tax Revenue Growth
Although Germany’s federal government and states will undoubtedly welcome news of additional tax revenues recorded in October, last month’s increase is significantly less than in previous months, due notably to a weakening economy.
In its monthly report, the finance ministry explains that the additional tax revenues are attributable predominantly to the ongoing positive performance of the labor market.
In October 2012, tax revenues stood at EUR37.7bn (USD48.9bn), up 2.5% compared with the same month last year (excluding local authority taxes). From January to October this year, cumulative tax revenues were up by 5.4% on the year. In September, the government recorded additional tax revenues of 4.2% compared with the same month in 2011.
The ministry reveals that revenues from wage taxes were up 6.7% in October 2012 over the same month last year and notes recorded increases in tobacco tax (+2%), motor vehicle tax (+11.5%), the country’s solidarity surcharge (+7.1%), and aviation tax (+20.6%).
In contrast, revenue from value-added tax (VAT) was down –3.7% compared with October last year, standing at EUR15.4bn.
In the third quarter of the year, gross domestic product rose by just 0.2%. For the final quarter of the year, many experts are predicting a minus. Nevertheless, private consumption is expected to remain strong.
Despite the fact that limited growth is undoubtedly slowing the rise in additional tax revenues, cash receipts are still on course to hit record levels. From January to October 2012, revenue totaled around EUR441bn, excluding local authority taxes. According to the latest tax estimate, total tax revenues, including local taxes, are expected to climb to around EUR600bn.