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Germany to enjoy bumper tax revenue

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Germany to enjoy bumper tax revenue
Finance Minister Wolfgang Schäuble, Photo: DPA
16:31 CET+01:00
This year promises to be a bumper year for Germany in terms of tax revenues, allowing the eurozone's powerhouse economy to make further progress in bringing down its deficit, new data showed Friday.

A working group of experts responsible for drawing up twice-yearly estimates for the government calculated that the federal, regional and municipal authorities will pocket €571.2 billion ($783 billion) in taxes this year.

That is 7.7 percent or over €40 billion euros more than last year and €16 billion above the previous estimate published in May.

"2011 will be a special, an exceptional year", enabling Germany to harvest the fruits of the vigorous economic growth seen in 2010, said the finance ministry's number two, Steffen Kampeter.

Nevertheless, tax revenue growth will slow to rates of around 3.6 percent in the following years as the economy loses momentum, the experts said.

For the federal government alone, the experts said they were forecasting €9.3 billion more in tax revenues for the current year than in their previous estimate in May.

That will reduce the government deficit to around €25 billion, compared with an official forecast of €48 billion.

Finance Minister Wolfgang Schäuble welcomed the revised estimates, saying the additional revenue would "make the task of consolidating public finances easier."

"But we mustn't forget that our overall debt is still way above the levels prescribed by the EU," Schäuble said. "It is therefore important to continue with our solid and moderate budgetary policies and not stray away from our target for a lasting and sustainable reduction in state debt."

AFP/bk

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