Government in the money

Germany's Tax Windfall

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The government is set to receive a bonus.
  • Why it matters

    Why it matters

    Tax revenues are rapidly growing at both the federal and state levels thanks to Germany’s surging economy and falling unemployment rate.

  • Facts

    Facts

    • Growth projections for Germany have been raised to 1.8 percent in 2015.
    • Instead of the expected €760 billion ($849 billion) in tax revenue, the state will likely rake in €768 billion.
    • The number of unemployed people in Germany is 2.8 million, 100,000 fewer than a year ago.
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    Audio

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For years, German finance ministers dreaded the date when tax revenue estimates were announced.

With every forecast, experts revised their estimates downward, especially during Hans Eichel’s tenure from 1999 to 2005. In 2001, for example, tax revenues were projected to be about €530 billion ($590 billion) in 2005, but only €452 billion found its way into the treasury.

The tide turned a few years ago.

With more people employed and spending their earnings, tax revenues have been steadily rising. When The Working Party on Tax Revenue Forecasting, an independent advisory council of the Federal Ministry of Finance, begins three days of discussions on Tuesday in the southwest city of Saarbrücken, it won’t be a question of whether forecasts should be adjusted upward, but by how much.

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