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Business

German tax revenues rise despite euro crisis

Despite a raging eurozone debt crisis around it, Germany has again been able to log rising tax revenues. The government says this is mainly due to a robust employment situation and higher incomes.

German tax revenues keep rising steadily both at federal and regional level, the country's Finance Ministry reported on Monday. It said in July alone revenues jumped by 8.6 percent month-on-month.

Between January and July 2012, a total of 311.4 billion euros ($384.1 billion) were brought into state coffers, up 5.0 percent from levels reached in the same period last year.

Tax revenues appeared unfazed by a drop in economic growth in the second quarter of the current year. While gross domestic product (GDP) rose by 0.5 percent in the first quarter, it only expanded by 0.3 percent in the second, the ministry stated.

More jobs, more revenues

"Looking at the big picture of current cyclical developments, there are indications that the German economic growth may slow down further in the course of the year," the Finance Ministry said in a statement.

It pointed out, though, that this did not necessarily have to mean shrinking tax revenues, as domestic consumption was expected to remain intact, leading to more state income from sales taxes.

The current tax revenue increase was mainly a result of a solid German labor market with just under three million people out of work. Revenues from income tax alone amounted to 13.5 billion euros in July, while sales tax gains were put at 15.8 billion euros, up 1.3 percent from the previous month.

hg/mz (Reuters, dpa)