Increased church tax revenue in Germany despite inflation - long-term burden on church coffers

Increased church tax revenue in Germany despite inflation - long-term burden on church coffers

According to a report by www.katholisch.de, the churches in Germany are facing loss of income due to high inflation despite increased church tax revenue. According to calculations by the German Economic Institute in Cologne (IW), revenue from church taxes fell by five percent in 2023, adjusted for inflation, although there was a nominal increase.

The aging of members puts a long-term strain on church coffers, as retirees generally pay less taxes. In addition, churches are feeling the effects of continued resignations. The increased income can only improve the situation temporarily, but in the long term further wage increases cannot compensate for the decline.

According to the report, the number of members of the two major churches in Germany fell by 900,000 to 40.1 million in 2022 due to resignations and deaths. Although reserves and assets can help temporarily, they are not a permanent solution. The churches should therefore prepare for falling tax revenues. The church tax, which is calculated based on the amount of income tax, is due in Baden-Württemberg and Bavaria by eight percent and in the rest of the country by nine percent.

As a financial expert, churches are facing long-term loss of revenue due to high inflation and an aging membership base. This could result in churches needing to focus more on alternative sources of income or managing their finances more efficiently in the future to ensure their long-term financial stability.