Tax estimate: Financial experts correct expectations for 2024 - little relief for the federal budget

Tax estimate: Financial experts correct expectations for 2024 - little relief for the federal budget

According to an initial federal tax estimate, tax revenue is slightly higher than expected. The Federal Minister of Finance described the figures as “sobering”. The financial scope of the federal, state and local governments remains tight. This hardly means any relief for Finance Minister Christian Lindner's budget. Overall, tax estimators expect revenue of 964.1 billion euros for 2024. According to the German Chamber of Commerce and Industry, the times when things automatically picked up again after economic downturns are over. The main reason for the crisis still lies in Russia's war against Ukraine: the aftermath of the energy price crisis, high interest rates and a weak global economy go hand in hand.

Experts are correcting the estimate for the period up to 2027. This is a far cry from the high growth rates of previous years, when budget politicians were still able to distribute billions on a regular basis. The state can benefit from high inflation. The higher the prices, the more taxes the federal, state and local governments collect. According to the forecast, tax revenue will rise above one trillion euros for the first time in 2025.

The tax estimators' forecast is an important basis for the final discussions on the 2024 federal budget. According to the tax estimators' calculations, the federal government and the Bundestag can now plan at least 3.8 billion euros more than in the spring. In comparison, the federal government can benefit significantly more than states and municipalities. Nevertheless, there is no new scope for distribution, emphasized Lindner when presenting the figures. It is important to set priorities wisely and make bold decisions when planning expenses.

Recently there have been many requests for additional spending, especially for relief for citizens and companies due to inflation and expensive energy. The question of whether VAT on food in restaurants will remain permanently reduced and whether new funds will be earmarked for sea rescue in the Mediterranean must be decided by the Bundestag. Lindner is pursuing a tough austerity course and has demanded a tough austerity course from the ministers. The debt brake anchored in the Basic Law must be adhered to again; tax increases are out of the question. Here, however, the weak economy could open up scope for spending and allow for low borrowing. In the spring, Lindner was still planning on having 16.6 billion euros in debt, but now it is likely to be a few billion more.

According to a report by www.t-online.de