Germany raises tax income forecast for this year

PanARMENIAN.Net - Germany on Wednesday, Oct 31, raised its tax income forecast for this year and said it expects to take in €29 billion ($37.5 billion) more than in 2011 thanks to robust growth and low unemployment, The Associated Press reports.

The overall tax revenue for the central government, state administrations and municipalities this year is now predicted to total €602.4 billion ($779.2 billion), according to the Finance Ministry. That latest estimate is up from the €596.5 billion forecast in May.

"The development of tax income confirms that the government is on a good path to keep fulfilling our task for Europe to be both, an anchor of stability and an engine of growth," Finance Minister Wolfgang Schaeuble said.

Government spending is expected to stay almost flat, which means the government will come close to balancing its budget next year, Schaeuble said.

This year the government expects to take on new debt of about €28 billion.

Germany, Europe's biggest economy, has seen solid growth over the past two years, but the eurozone's lingering debt crisis is starting to take its toll, and the government recently lowered its growth forecast for next year from 1.6 percent to 1 percent. This year the economy is expected to expand by about 0.8 percent.

The May tax income forecast saw the state coffers further swelling in the coming years, but Wednesday's outlook was a bit more pessimistic amid sluggish growth, saying the total tax take from 2013 through 2016 will be about €2.1 billion lower than previously predicted.