As positive as the tax calculation was in May, it is now suffering a significant setback. For the upcoming election year of all things, the experts are correcting their estimates for Bavaria downwards.
Munich (dpa / lby) - Bavaria's tax authorities must expect a significant decline in the forecast tax revenue in the coming year. "The regionalization of the tax estimate results for Bavaria in 2023 means a net minus of around 0.6 billion euros compared to the May estimate. In addition to the general economic slowdown, this also results from the numerous prospects of relief for people and companies – these must be taken into account,” said Finance Minister Albert Füracker (CSU) of the German Press Agency in Munich.
The May tax estimate had predicted a big plus in revenue of 2.4 billion euros for Bavaria for 2023 - compared to the forecast about a year ago, which was shaped by the Corona crisis.
On Thursday, Federal Finance Minister Christian Lindner (FDP) presented the tax forecast for the federal, state and local governments up to 2026 in Berlin. The tax estimators assume that the federal, state and local governments will earn around 126.4 billion euros more by 2026 than expected in May. This year, however, tax revenue is expected to be 1.7 billion euros lower than predicted. Based on these figures, the regionalized figures for Bavaria were calculated in the next step on Thursday evening.
"Basically, I think the current tax estimates are overly optimistic - the current economic situation is extremely volatile and uncertain," stressed Füracker. According to all forecasts, Germany is at the beginning of a recession and nobody knows what challenges the country will face in the coming months.
"The state also has high unplanned inflation-related additional expenditure, for example in state construction measures and in energy and management costs," said Füracker. "We must be very aware of these significant forecast risks. Restraint and forward-looking planning must be our guiding principle."
It will be exciting to see how Füracker can enforce this requirement in the upcoming state government budget meeting against the wishes and demands of the ministers around Prime Minister Markus Söder (CSU). After all, there will be elections in Bavaria next year - and one government doesn't like to be stingy.
Lindner had also pointed out that the estimation results were characterized by a high degree of uncertainty. The risks for economic development are great, especially with regard to possible bottlenecks in the energy supply in the coming months.
One of the reasons for the rising tax revenue according to the federal forecast is the high rate of inflation. As long as consumers do not limit their consumption, inflation favors tax revenues. Because if goods become more expensive, the income from the taxes that have to be paid on them also increases. Above all, the value added tax flushes more money into the coffers. The number of employees also has a positive effect on tax revenue: if many people are employed, more wage and income tax revenue flows into the state coffers.
The tax assessment working group meets twice a year, in spring and autumn. The committee consists of experts from the Federal Government, the leading economic research institutes, the Federal Statistical Office, the Bundesbank, the Council of Experts for the Assessment of Economic Development in Germany, representatives of the state finance ministries and the municipalities.
