By Andreas Kissler
BERLIN (Dow Jones) — German tax receipts rose 0.8 percent in January after falling the previous month. This was announced by the Federal Ministry of Finance in its monthly report. “The increase was due to a 2.1 percent increase in community taxes,” the ministry said. “Receipts from the two types of tax that generate the most revenue, wage tax and sales tax, recorded significant growth.” On the other hand, there would have been a decline in revenue from the other community taxes, essentially corporation tax, the unassessed income taxes and the withholding tax on interest and sales proceeds.
In January, the federal government booked 7.3 percent more tax revenue, reaching 23.5 billion euros. The federal states, on the other hand, received 0.8 percent less in taxes at 28.1 billion euros. Total tax revenue in January was around 58.0 billion euros. In December 2022, tax revenue had increased by 2.4 percent. In the entire past year, they had increased by 7.1 percent.
With regard to further economic development, the ministry’s economists explained that in the short term, based on the available leading indicators and the persistently high inflation, which according to a provisional estimate by the Federal Statistical Office amounted to 8.7 percent in January, “we can continue to expect subdued economic development”.
For the remainder of the year, current economic forecasts generally assume that economic momentum will “gradually gain momentum again after a difficult winter half-year” if the currently high rate of inflation weakens, the impetus from the fiscal stabilization measures takes effect, supply bottlenecks ease further and the global economy pick up some speed again. “However, the outlook remains subject to a high degree of uncertainty,” emphasized the ministry.
The economists emphasized that gross domestic product (GDP) declined in the final quarter of 2022. “In view of the very high inflation rates and energy prices and the associated loss of purchasing power, private consumption, which had noticeably supported GDP over the course of the year, had a negative impact.”
In December there were also setbacks in industrial production and foreign trade. The subdued global economic development is also likely to have had an impact here. In contrast, the labor market continued to be robust at the start of 2023, measured against the overall economic burden.
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DJG/ank/smh
(END) Dow Jones Newswires
February 20, 2023 18:00 ET (23:00 GMT)