Plunging Tax Revenues Give Berlin Budget Headache | Business| Economy and finance news from a German perspective | DW | 06.05.2004
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Plunging Tax Revenues Give Berlin Budget Headache

German Finance Minister Hans Eichel needs to find a way to plug a gap of almost €10 billion in the federal budget due to lower than expected tax revenues this year. The business daily Handelsblatt reported that, according to a group of tax estimation experts, Eichel will have to make do with €444 billion in tax revenues instead of the planned €453.4 billion. Tax revenues in 2005 will also be less than expected, the experts said, blaming the shortfall on the early introduction of Germany's tax reform, as well as weak economic growth. The state of the federal budget is proving to be a point of tension between the ruling coalition parties. The Green Party's financial expert Christine Scheel said that the country will have to reckon with a budget shortfall of €18 billion. But the Social Democrats have denied this, saying that while there is a gap, it is nowhere near that big.