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German tax revenue windfall

February 21, 2014

Germany's Finance Ministry has said there's been a renewed increase in overall tax revenues in the new year. The government attributed the development to a healthy labor market and stronger domestic demand.

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Image: picture-alliance/dpa

The Finance Ministry reported Friday that tax income rose significantly in January both at federal and regional levels.

It said overall tax revenues for the month amounted to 41.5 billion euros ($56.9 billion), marking a 3-percent rise from results in the same month a year earlier.

Federal-level tax income rose by 2.4 percent year-on-year, while the country's 16 states surged by 8.7 percent, the ministry stated in its report.

Calm waters ahead

The rise was mainly due to an increase in income and sales tax, reflecting continuously low unemployment as well as a pick-up in domestic demand, with people's willingness to spend more caused by record-low interest rates.

German tax revenue to increase

Economic pundits said the tax revenues were likely to increase further in the months ahead as the both the national and global economies were expected to pick up momentum.

The German government had said it predicted 1.8 percent growth throughout the current year, with a 2 percent expansion of the economy penciled in for 2015.

hg/hc (dpa, Reuters)