On 10 May the 140th meeting of the "Tax Revenue Forecast" Working Group held in Frankfurt on the Oder drew to a close. The forecast for tax revenues was revised upwards for the fourth consecutive time. The estimates are made for the time period of 2012 to 2016. Compared to the previous estimate of November 2011, revenues for the current year will be 4.6 billion euros higher than expected. In the subsequent years through 2016 additional revenues will total 5 to 7 billion euros annually.
The correction in the forecast is not due to an upturn in trends in gross domestic product. The expected growth rate of nominal gross domestic product even declined by 0.1% compared to the November forecast for 2012. However, both gross wages and salaries and private consumption rose more strongly than expected. New revenues are once again generated primarily by personal income tax and sales tax.
According to this forecast, the taxation rate in relation to gross domestic product will increase from 21.4 percent in 2010 to 23.2 percent in the year 2016. This year a taxation rate of 22.7 percent is already expected. The rising taxation rate is a result of additional revenues from income tax due to inflation and tax progression. Planned, but to date unapproved legislative changes such as cut-backs to cold progression are not taken into account in the tax revenue forecast.
Table Ergebnisse der Steuerschätzung vom Mai 2012 (PDF, in German)
A detailed report of the tax forecast will be published in the next issue of ifo Schnelldienst
Das Bundesministerium der Finanzen: Ergebnisse der Steuerschätzung.
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