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Business

German tax income robust, despite weaker economy

Germany's tax revenue service has collected more taxes than expected in the first half of 2013. Higher corporate profits and rising employment have resulted in a robust tax growth, despite faltering economic output.

Tax collectors in Germany raked in a total of 277 billion euros ($364 billion) in taxes in the first six month of 2013, up 3.5 percent from the same half-year period in 2012, according to official government data published in the German business daily Handelsblatt on Monday.

The increase was higher than originally calculated by a group of tax experts, which had forecast a rise by just 2.5 percent in an official government tax estimate published in May this year.

The positive development in state income was primarily caused by higher wages on top of low unemployment in Germany, Handelsblatt quoted from the Finance Ministry report.

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German income tax revenue rose 7.2 percent compared with the same period in 2012, soaring by 5 billion euros, according to the government figures. In the month of June alone income form the state's main source of tax revenue jumped exceptionally strong with 8.7 percent.

In addition, taxes paid on corporate earnings also surged in 2013, the report said, rising 9.3 percent. The tax was holding up astonishingly robust, the finance Ministry said, despite a worsening global economic environment which was hitting German export businesses.

In the report, the government expressed the belief that tax revenues would continue to grow in the second half of 2013, as it expected the German recovery to gather momentum.

uhe/rc (Reuters, dpa, AFP)

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