Germany To Rake In Higher-Than-Expected Tax Revenues

German Finance Minister Wolfgang Schaeuble announced on Wednesday that the nation’s tax receipts for this year would be at least 5.8 billion euros ($7.5 billion) higher than previously forecasted “due to favourable economic trends pushing up wage income and company profits.”

German Finance Minister Wolfgang Schaeuble announced on Wednesday that the nation’s tax receipts for this year would be at least 5.8 billion euros ($7.5 billion) higher than previously forecasted “due to favourable economic trends pushing up wage income and company profits.”

Schaeuble noted that the additional revenue would result in a “near-balanced” budget next year and said that the latest financial results were “gratifying”, given that the government could come up with a balanced budget “three years earlier than called for by fiscal stipulations in our constitution.”

[quote]”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,” the finance minister said, as cited by the Associated Press.[/quote]

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“Our finances are in good shape. Now we have to stick to the course,” he added, according to AFP.

Nevertheless, Schaeuble warned that, with the sole exception of 2014, annual tax revenues in the future were unlikely to hit new records. Tax receipts for 2012 is now forecasted to reach 602.4 billion euros, higher than the 596.5 billion euros forecast in May.

“Germany will already this year lower its deficit to below 0.5 per cent of GDP and from 2014 have a balanced budget again,” he said.

[quote]”With the extra income in 2012 we can further reduce our net new borrowing… Our policy of growth-friendly consolidation works,” Schaueble added.[/quote]

According to German publication Deutsche Welle, Norbert Walter-Borjans, the Social Democrat Finance Minister of Germany’s most populous state, North Rhine-Westphalia, has already urged the central government in Berlin, as well as regional authorities, to use the additional windfall responsibly.

Walter-Borjans said that extra revenues should primarily be used to cut public debt, while granting tax breaks should not be a priority.

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