Significant increase in tax revenue

Status: 01/28/2022 04:12 a.m

Federal, state and local tax revenues have increased significantly over the past year. The Federal Ministry of Finance recorded an increase of 11.5 percent compared to the Corona crisis year 2020.

Federal and state tax revenues increased significantly again last year. Compared to the first Corona crisis year 2020, they increased by 11.5 percent to almost 761 billion euros, as announced by the Federal Ministry of Finance.

The forecasts of experts were once again clearly exceeded. The tax estimation working group had recently assumed almost 745 billion. In December 2021, the momentum was even stronger. There was an increase in revenue of 19.5 percent for the federal and state governments with 111.5 billion euros.

Significant increase in tax revenue

Tagesschau 1:57 a.m., 28.1.2022

Better economic development

The federal states benefited from the economic recovery, while the federal government still has to shoulder many corona burdens. Overall, pure federal taxes fell by 7.1 percent in 2021, while taxes accruing to the states alone rose by 13.8 percent. There was a 15 percent increase in taxes due to both tiers.

Last year, the German economy grew by 2.7 percent. However, this has not yet compensated for the 4.6 percent slump from the first year of the Corona crisis in 2020. The at least better economic development is also reflected in taxes: the sales tax – reduced for six months in 2020 – climbed by 14.3 percent in 2021, income tax by 14.8 percent and the corporate income tax, which depends largely on the profit development of companies, by almost 74 Percent.

No relief from inflation

The renewed increase in travel activity also had an impact: the air traffic tax was almost 94 percent above the level of 2020. With the recently sharp rise in inflation, there are no signs of any real easing in the short term after inflation was 5.3 percent in December.

“At the beginning of 2022, the inflation rate should fall somewhat,” said the Ministry of Finance. “Nevertheless, the rate should initially remain at a level that is noticeably higher than in the years before the crisis.” Further declines to a more moderate level are to be expected in the course of the year. Economics Minister Robert Habeck said this week that he would expect an inflation rate of 3.3 percent (2021: 3.1 percent) in 2022 and would only see a decline to two percent again in 2023.

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