Tax estimates: Revenues significantly lower than expected

Not a good starting point for the new federal government: According to current estimates, tax revenues up to 2029 will be significantly lower than expected.

The new federal government, consisting of the Christian Democratic Union (CDU/CSU) and the Social Democratic Party (SPD), must expect significantly lower tax revenues than forecast in the fall of 2029 when implementing its coalition agreement. According to the tax estimate, 33.3 billion euros less will end up in the federal coffers than assumed last October.

This will not make the work of the new Finance Minister Lars Klingbeil (SPD) any easier. "The results show: "We must

Economic growth will strengthen revenues," explained the SPD politician.

"This is the only way we can gain new financial flexibility. We are therefore now initiating the largest modernization of our country in decades."

Nevertheless, the result of the tax estimate remains largely as expected during the coalition negotiations.

The tax estimate for the federal government is also disappointing: By 2029, the federal government, the states, and municipalities will receive €81.2 billion less. Of this, €26.2 billion will accrue to the states and €27.2 billion to German municipalities.

The federal government's economic forecast remains an important basis for estimating tax revenues. This forecast also delivered mixed results at the end of April: For the third consecutive year, the German economy is not growing, and gross domestic product is stagnating. The government expects a meager recovery of 1% next year.

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The new Finance Minister, Lars Klingbeil, aims to have the budget for the current year drawn up and passed through the cabinet by June 25. This will be significantly later due to the breakdown of the traffic light coalition and the early federal election. The budget is expected to be approved by the end of September.