Tax revenues from the federal and state governments also increased in May. The tax authorities recorded an increase of 2.6 percent to 61.2 billion euros compared to the same month last year, according to the monthly report from the Federal Ministry of Finance on Thursday.
The impetus here came from increases in wage tax and a rise in the withholding tax on interest and capital gains. In contrast, revenues from sales tax and corporate tax were lower than a year ago. In the first five months of the year, this represents an increase of 2.8 percent to 322.3 billion euros.
The latest tax estimate showed that taxes in 2024 (excluding municipal taxes) are likely to rise by 4.1 percent to just under 864 billion euros. Nevertheless, Federal Finance Minister Christian Lindner (FDP) does not see any new financial leeway in the foreseeable future. The traffic light coalition is currently in talks on drawing up the 2025 budget. The SPD, Greens and FDP are still having a hard time finding a common line.
Experts at the Finance Ministry expect a moderate economic recovery in Germany in 2024. “Private consumption is likely to recover over the course of the year if the increases in real purchasing power stabilize,” they say, according to Reuters.
With a gradual recovery in world trade, the sales prospects of German exporters should also improve and the turnaround in German foreign trade should be consolidated. “However, geopolitical and trade policy uncertainties remain high.”
