Germany Chasing Down Balanced Budget

November 1, 2012 Taxation in Germany

Wolfgang SchäubleBERLIN – Favorable economic conditions, constrained government spending and increasing tax revenues may allow Germany to close the budget deficit in the near future.

On October 31st the Finance Minister of Germany Wolfgang Schaeuble revealed that the government now expects the cumulative tax revenues for 2012 to reach EUR 602.4 billion, which is EUR 5.9 billion more than the government’s previous forecast and will be EUR 29 billion more than total collections in 2011.

The Minister assured that the increasing revenues will not be offset by a rise in government spending, and the extra revenues will be directed to balancing the national budget by the end of 2014.

Taking into consideration the new revenue data, the government expects that during 2013 and 2014 the tax collections will reach EUR 618 billion and EUR 642.3 billion respectively, with newly issued estimates being approximately in line with forecasts prepared earlier in May 2012.

While commenting on the impact of the new increase in revenue collections, the Minister said that it would be a benefit to not only for Germany but also for all of its European neighbours, and “…the development of tax income confirms that the government is on a good path to keep fulfilling our task for Europe to be both, an anchor of stability and an engine of growth.”

Photo by World Economic Forum