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ECONOMY

Bavarian firms: tax check once in 250 years

Small businesses in Bavaria have little to fear when it comes to having the tax collectors paying them a visit – they are likely to be checked only once in 250 years.

Bavarian firms: tax check once in 250 years
Photo: DPA

Bavaria’s independent tax agency almost always ranks last in Germany for the number of jobs filled, and the lack of personnel means that much of the investigating in the southern state goes undone, the Süddeutsche Zeitung reported on Monday.

“When someone is sick, there is no one there to replace them,” an anonymous employee at the Bavarian tax office told the newspaper. The work they miss simply goes unchecked. “That is unfair, but is politically supported,” the employee said.

It seems to be the stress of the job that may keep many potential new employees at bay. The Bavarian finance union cited over-work and exhaustion for some of the reasons behind the many open positions for tax investigators, according to the Süddeutsche Zeitung.

The Bavarian budget for 2011 accounted for 16,457 tax investigators, but only 14,554 of those jobs were filled. In all, the state agency lacks some 20,000 personnel, reported the newspaper.

Statistically, that means a small business in the state has the chance of being audited once every 250 years, even though only about half of the 1.1 million small businesses in Bavaria are considered relevant for audit, according to the paper.

The Local/mbw

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ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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