Ministry of Finance predicts higher tax revenues

According to tax estimates, the federal, state, and local governments can expect higher tax revenues by 2029 than previously expected. The skilled trades sector is calling for the additional revenue to be used to ease the burden on businesses and employees.

"What we are doing is working. Our investment package is a strong stimulus for new economic growth. The more positive outlook is also reflected in rising tax revenues. This, above all, strengthens the ability of states and municipalities to act," said Federal Finance Minister Lars Klingbeil (SPD) while presenting the results of the current tax estimate. 

In it, the Ministry of Finance Taking into account the tax law changes that will come into force by October 2025, the tax authorities predict revenues of €990,7 billion, €11 billion more than previously estimated. By 2029, the projected additional revenues compared to the spring forecast total over €33 billion.

Consolidation pressure remains high

The more positive growth prospects and tax revenues are no reason to sit back now, Klingbeil emphasizes. "The pressure to consolidate the federal budget remains high. We will continue to pursue a strict consolidation course with an eye on the budget gaps from 2027 onwards. We will also continue to push forward with reforms to make the economy more competitive, reduce bureaucracy, and make our welfare state fit for the future."

Holger Schwannecke, Secretary General of the Central Association of German Crafts, agrees with the Finance Minister: "It would be a mistake to ease the consolidation pressure now. On the contrary: public spending must be further scrutinized. Given the high spending pressure, particularly in the social sector, there is no time to lose."

Relieve the burden on businesses and employees

He calls for additional revenue to be used to ease the burden on businesses and employees. "The reform of the income tax rate, as envisaged in the coalition agreement starting in 2027, should not be postponed any longer. The electricity tax reduction must also finally be implemented across the board for everyone and without unnecessary bureaucracy."

Politicians shouldn't rest on their laurels after a slight increase in tax revenue. Schwannecke: "Anyone who wants more tax revenue in the long term must ensure that companies invest and that performance is rewarded. To achieve this, small and medium-sized businesses and their employees must finally be given more breathing room."

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