Despite the Ukraine conflict, tax revenues have risen sharply.
(Photo: imago images/Jens Schicke)
Federal and state tax revenues rose sharply in the first month after Russia invaded Ukraine. In March they were 17.2 percent higher than a year earlier and totaled 82.4 billion euros, according to the monthly report published by the Federal Ministry of Finance on Friday. “The effects of the Ukraine conflict have not yet been recorded in tax revenue,” it said.
In the entire first quarter, tax revenue grew by 18.1 percent to a good 203 billion euros. Sales tax revenue increased by more than a third, and income tax revenue by more than ten percent. The Ministry of Finance pointed out that the previous year’s basis had been significantly weakened due to the corona pandemic. This would have resulted in considerable growth rates in the revenue from most types of taxes.
Sooner or later, the economic consequences of the war will also make themselves felt in the coffers of the federal and state governments. “While the domestic effects of the corona pandemic on the German economy are currently weakening, Russia’s war of aggression in Ukraine, which began in February, is dampening the prospects,” says the monthly report. The business and consumer climate had recently clouded over noticeably.
“Because the war contributes directly to price increases for energy and food, increases general uncertainty and in individual branches of industry puts additional strain on the supply chains that are already strained by the pandemic,” said the ministry of department head Christian Lindner (FDP).
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The leading economic research institutes have therefore significantly lowered their forecast for growth in gross domestic product this year. In their spring forecast for the federal government, they only assume growth of 2.7 percent, after having expected an increase of 4.8 percent in the autumn. The government wants to present its own projections next week, which in turn form the basis for the tax estimate.
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