Significant Increase in Tax Revenues
In March 2025, the tax revenues of the German state (excluding municipal taxes) increased by a remarkable 11 percent compared to the same month in the previous year. According to the Federal Ministry of Finance (BMF), the communal taxes, which make up the largest part of the tax revenue, rose by 11 percent. The state taxes increased by an impressive 22 percent, while the federal taxes recorded a growth of about 7 percent.
Financial Situation and Economic Policy
This increase provides valuable insights into the current financial situation of Germany. Despite moderate economic development in 2025, with a projected growth of around 1.3 percent starting from a lower level, there is a robust tax base.
- Increased Revenues: This gives the state more financial leeway for investments and expenditures.
- Planned Measures: The coalition agreement includes tax policy measures such as an investment booster through declining depreciation on capital investments (30% between 2025 and 2027) and a gradual reduction in corporate tax starting in 2028.
- Fiscal Stability: The increased revenues could be used to finance planned investment incentives while ensuring fiscal stability.
Overall, the increased tax revenues in March reflect a positive development that indicates a solid financial position of the state despite the overall moderately growing economic environment, opening up room for economic policy measures.