Germany has reduced its tax revenue forecast by €81.2 billion for the period between 2025 and 2029, according to updated figures from the country’s council of tax experts. The drop reflects the impact of economic stagnation and planned tax relief measures aimed at reviving growth.
The federal government alone is expected to collect €33.3 billion less than previously estimated over the next five years. For 2026, federal tax income is forecast to fall by €10.2 billion.
Finance Minister Lars Klingbeil, who took office last week, said the government needs to boost economic growth to create more financial flexibility. He expects a slight improvement in revenues starting in 2027.
Germany’s economy has been the only G7 economy not to grow over the past two years, and the government is working on new measures to reverse the trend. Klingbeil announced that by the end of June, the cabinet will approve the 2025 draft budget, which will include tax relief for businesses and a new €500 billion infrastructure fund.
This year, the federal government will receive €0.6 billion less than forecast, states are expected to receive €1.1 billion more, and municipalities will get €3.5 billion less.
The 2025 draft budget comes after the previous government failed to pass it on time following the collapse of former Chancellor Olaf Scholz’s coalition in November. Once passed, the 2026 budget will be drafted in July, with parliamentary discussions set to begin in September.
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