CashNews.co
By Maria Martinez
BERLIN/WASHINGTON (Reuters) -Germany’s council of tax experts expects 58.1 billion euros ($62.72 billion) less in total tax revenue in the 2024-2028 period compared with its May forecast, projections on Thursday showed.
For the federal government alone it expects 12.6 billion euros less in tax revenues in the five-year period, according to the updated estimates.
For 2024, the federal government will record a shortfall of 3.4 billion euros compared with the last estimate from May.
For the federal states, there will be a shortfall of 2.3 billion euros in 2024 and a shortfall of 600 million euros for the municipalities.
“There is no new room for manoeuvre in the budget. On the contrary: We will have to consolidate further,” German Finance Minister Christian Lindner said on Thursday in Washington.
The cabinet approved the 2025 budget, which included a 12 billion euro ($12.95 billion) funding shortfall, in the summer after months of wrangling. But it left open the issue of how to reduce the gap between projected spending and revenue.
Lindner announced that the budget gap has increased to 13.5 billion euros, even when 700 million euros more are expected in tax revenues for the federal government in 2025.
Due to the higher consolidation need, the finance ministry has decided to make full use of an additional 5.4 billion euros in debt allowed under its so-called ‘debt brake’ legislation that restricts government borrowing.
“We cannot rely on the fact that tax revenues will keep flowing. We need economic growth,” Lindner said.
($1 = 0.9264 euros)
(Reporting by Maria Martinez, Kirsti KnolleEditing by Miranda Murray)