Tax revenues collapse

The relief measures adopted at the end of 2022 will lead to significantly lower tax revenues, even if the unexpectedly good economy last year will at least compensate for this to some extent.

According to the results of the latest tax estimate, tax revenues for the federal government, federal states and local authorities are developing worse than expected this year. Compared to the estimate in October 2022, tax revenues are around €30 billion lower per year, but with a volume of €920.6 billion for 2023 alone, they are still at a record level.

The decline is primarily due to the expected effect of the tax relief measures that have since been passed as a result of the Annual Tax Act 2022 and the Inflation Adjustment Act. Despite the current sluggish economy, the economic changes are expected to generate slight additional revenue of around EUR 4 billion per year. However, this additional revenue will be offset by significantly higher burdens due to the measures adopted and a considerable increase in interest expenditure. Overall, this is expected to result in a shortfall in revenue of EUR 30.8 billion in 2024.