Germany set to collect more-than-expected tax revenues this year

Source: Xinhua| 2018-09-20 23:24:38|Editor: Mu Xuequan
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BERLIN, Sept. 20 (Xinhua) -- The German government is experiencing a larger-than-expected windfall from tax revenues in 2018, according to a monthly report published on Thursday by the ministry of finance.

According to the report, fiscal authorities have so far recorded an annual 6.4-percent increase in tax receipts to a total of 454.44 billion euros (531.8 billion U.S. dollars) during the first eight months of 2018.

Back in May, the ministry of finance had released an official forecast in which it expected to witness lower revenue growth of 5.3 percent in the course of the year.

In the most recent measurement month of August, tax revenue in the Eurozone's largest economy was measured at 49.87 billion euros.

The figure marked a 4.1-percent increase compared to the same period last year in spite of a slowing of gross domestic product (GDP) growth recorded at the start of the third quarter of 2018.

Fiscal authorities also recorded a further increase in payroll tax receipts by 3.9 percent between August 2017 and August 2018. The ministry of finance attributed the development to the lasting strength of the German labor market and related increases in nominal and real wages.

A separate study published on Thursday by the Federal Statistical Office showed that wages (plus 2.5 percent) still grew ahead of inflation (plus 2 percent) in the second quarter of this year, although the latter figure marked the fastest rate of consumer price increases in six years.

Looking forward, the report expressed confidence that Germany would be able to sustain its current economic momentum into the foreseeable future.

"The German economy remains on a course for growth even if the dynamic is likely to weaken slightly," the finance ministry wrote.

Key risks in this context were posed by the "principle risks" of protectionism and the danger of a further escalation of global trade conflicts initiated by U.S. President Donald Trump.

Threats posed to German exporters by new tariff barriers hereby stemmed from Trump's "America First", as well as the "still uncertain" outcome of Brexit negotiations.

Additionally, the ministry pointed to difficulties experienced by automotive firms during the transition to the new Worldwide harmonized Light vehicles Test Procedure (WLPT) in the European Union (EU) as "potentially having a negative economic effect".

The official outlook of the ministry thus echoed recent studies published by the German Central bank (Bundesbank) and several leading economic institutes which predict continued but weaker GDP growth.

On Wednesday, the Cologne Institute of the German Economy (IW) lowered its forecast for gross domestic product (GDP) expansion this year from 2 percent to 1.8 percent and from 2 percent to 1.4 percent in 2019 to account for the adverse impact of Trump's "America First" doctrine.