Tags: Germany | Tax | Income | Estimates

Germany's Tax Income to Fall Short of Estimates

Thursday, 06 May 2010 02:06 PM

 

The German government's tax income will be lower than expected this year and for several years to come, the Finance Ministry said Thursday — underlining questions about prospects for tax cuts in Europe's biggest economy.

The Finance Ministry said Thursday that a regular meeting of experts estimated this year's tax take at 510.3 billion euros ($658.4 billion) — 1.2 billion euros short of their previous forecast in November. Last year's total income was 524 million euros.

They predicted a total of 515 billion euros in 2011 — 11.7 billion euros short of the last estimate. Figures for 2012 and 2013 also fell more than 10 billion euros short of those previously predicted.

Chancellor Angela Merkel's center-right coalition took office last October with vague pledges of tax relief to stimulate the economy, but the governing parties have been at odds as to when and by how much to cut.

The pro-business Free Democrats, the junior partners in the coalition, renewed their call for cuts.

"The figures once again prove that the state has a spending problem, not an income one," prominent party lawmaker Otto Fricke said. "In view of low growth rates, we must provide stimuli for growth by cutting taxes in order to strengthen domestic demand."

Finance Minister Wolfgang Schaeuble wasn't forthcoming on how large tax relief would be, but said decisions would be made "on the basis of the revised futures."

He pointed to the current Greek debt crisis as evidence that "the solidity of state finances is of existential significance."

"Germany as an anchor of stability is needed as a credible example for the European Union, beyond the euro zone — today and in the future," Schaeuble told reporters.

He reiterated that Germany's budget deficit this year will be more than 5 percent of gross domestic product — above the European Union-mandated limit of 3 percent. "We will do everything to get the deficit back below 3 percent by 2013," he added.

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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