A panel of fiscal experts has said Germany looks set to secure a record amount in tax revenues this year, billions of euros (dollars) more than originally expected. The windfall is the result of a stable labor market.
The German federal government, along with the country's states and communities, can look forward to record tax revenues in 2012, a report by fiscal experts said on Wednesday. They spoke of tax income to the tune of 602.4 billion euros ($783 billion), six billion euros more than predicted during their last previous forecast in spring.
German Finance Minister Wolfgang Schäuble called the results of the latest tax estimate "gratifying" and added that the federal government could probably come up with a balanced budget as early as 2013. "That would be three years earlier than called for by fiscal stipulations in our constitution," Schäuble said.
The government in Berlin attributed the positive development to the domestic economy's ability to steer clear of recession, while many of its fellow eurozone partners had been grappling with contraction for many quarters in a row.
How to proceed?
Schäuble warned, though, that with the sole exception of 2014, annual tax revenues would be unlikely to hit new records.
The managing director of the Federation of German Industry (BDI), Markus Kerber, spoke of a surprisingly good development at the moment. "Economic growth in the country generates high tax revenues and reduces the state's welfare spending," he said. "That delivers a double dividend."
Norbert Walter-Borjans, Social Democrat Finance Minister of Germany's most populous state, North Rhine-Westphalia, urged the government in Berlin and regional authorities to use the windfall responsibly. He said extra revenues should primarily be used to cut public debt, adding that granting tax breaks should not be a priority.
hg/mz (dpa, Reuters)