Navigation and service

21 April 2017

April 2017 month­ly re­port

Translated abstract of the Federal Ministry of Finance's April 2017 monthly report

Federal budget trends in the first quarter of 2017

Trends in the federal budget

 

Actual 2016

Estimated 2017

Actual1 as of
March 2017

Expenditure (€bn)2

310.6329.184.4

Year-on-year change in % (year to date)

  +1.1
Revenue (€bn)2316.8322.181.6

Year-on-year change in % (year to date)

  +9.3
Tax revenue (€bn)289.0301.076.9

Year-on-year change in % (year to date)

  +16.8

Fiscal balance (€bn)

6.2-7.0-2.8

Financing/use of surplus:

-6.27.02.8

Cash resources (€bn)

--42.8

Revenue from coin (€bn)

0.30.3-0.1

Transfer to reserve funds (€bn)

-6.56.70.0
Net borrowing/current financial market balance3 (€bn)0.00.0-39.8
1 As per accounts.
2 Excluding revenue and expenditure from internal offsetting.
3 (-) debt repayment; (+) borrowing
Source: Federal Ministry of Finance

Revenue trends

Federal revenue totalled 81.6bn in the first quarter of 2017, an increase of 9.3% (+€6.99bn) compared with the same period last year. The total for the first quarter corresponds to a quarter of the budgeted revenues for the whole of 2017. Tax revenue, which accounts for the largest share of total revenue, totalled €76.9bn in the first quarter, up by 16.8% over the first quarter of 2016. Other revenue was down by €4.1bn on the year, but has reached 22% of the 2017 target and is therefore within the planned range. The difference compared with last year was largely the result of a €2.8bn fall in the Bundesbank’s profits.

Trends in federal revenue

Actual

2016

Estimated

2017

Actual

Year‑on‑year
change in %
(year to date)

January to March 2016

January to March 2017

€m

Share
in %

€m

Share

in %

€m

I. Tax revenue

288,99191.2301,02993.565,86976,936+16.8

Federal share of joint taxes:

235,74774.4246,46976.557,26561,147+6.8

Revenue from personal and corporate income taxes (incl. final withholding tax on interest and capital gains)

127,46340.2130,18740.429,24831,986+9.4

of which:

       

Wages tax

78,51924.882,93925.816,39317,577+7.2

Assessed income tax

22,8797.223,0267.16,1917,229+16.8

Non-assessed taxes on earnings

9,7313.19,6103.01,4871,818+22.3

Final withholding tax on interest and capital gains

2,6130.82,3060.79601,107+15.3

Corporation tax

13,7214.313,2494.14,2174,255+0.9

Value added taxes (VAT)

106,52933.6114,43635.527,97229,054+3.9

Trade tax apportionment

1,7550.61,8460.645107+137.8

Energy duty

40,09112.739,79612.44,6204,812+4.2

Tobacco duty

14,1864.514,7004.62,7222,637 -3.1

Solidarity surcharge

16,8555.317,4505.43,9794,324+8.7

Insurance tax

12,7634.013,0504.15,9466,178+3.9

Electricity duty

6,5692.16,5302.01,6851,746+3.6

Motor vehicle tax

8,9522.88,9002.82,4892,536+1.9

Nuclear fuel tax

4220.100.000X

Spirits duties

2,0720.72,0510.6566578+2.1

Coffee duty

1,0400.31,0500.3255249 -2.4

Aviation tax

1,0740.31,1010.3178190+6.7

Supplementary grants to Länder

-9,845-3.1-9,228-2.9-2,388-2,271 -4.9

EU GNI own resources

-19,911-6.3-21,680-6.7-5,938-379 -93.6

EU VAT own resources

-4,250-1.3-2,440-0.8-1,523-591 -61.2

Grants to Länder for public transport

-8,200-2.6-8,144-2.5-1,852-2,087+12.7

Grants to Länder for motor vehicle tax and HGV toll

-8,992-2.8-8,992-2.8-2,248-2,248+0.0

II. Other revenue

27,8398.821,0216.58,7534,630 -47.1

Revenue from economic activity

6,8472.25,4681.73,242450 -86.1

Interest revenue

3020.13000.15353+0.0

Loan repayments, holdings, privatisation revenue

2,8900.91,8000.6470246 -47.7

Total revenue1

316,829100.0322,051100.074,62281,565+9.3
1 Excluding revenue from internal offsetting.
Source: Federal Ministry of Finance.

Expenditure trends

Federal expenditure in the first quarter of 2017 totalled €84.4bn, representing a quarter of budgeted expenditure for the whole of 2017. Expenditure in March 2017 was up by 1.1% (+€0.9bn) over the same period in 2016.

Federal spending is separated into consumption and investment expenditure. Consumption expenditure in the first quarter of 2017 was up by 1.5% over last year. Within this category, human resources spending rose by 4.3% and operating expenditure by 6.6%. Ongoing grants and subsidies to other areas also posted a clear increase, which was largely due to higher spending on pensions, on benefits such as unemployment benefit and parental allowance, and on social security. Almost 30% of the planned 2017 budget for this category has already been spent. The decline in interest expenditure, which fell by €1.3bn (-16.1%) on the year in the first quarter of 2017, significantly mitigated the increase in consumption expenditure. Investment expenditure declined by 4.3% (-€0.3bn) on the year, which was related to a reduction in federal financial assistance. In contrast, fixed asset investment was up by 32.1%.

Trends in federal expenditure by function

Actual

2016

Estimated

2017

Actual

Year‑on‑year

change in %
(year to date)

January to March 2016

January to

March

2017

m

Share

in %

€m

Share

in %

€m

General public servic

72,181 23.277,807 23.618,52018,348 -0.9

Economic cooperation and development

7,732 2.58,501 2.62,4532,000 -18.5

Defence

34,613 11.136,620 11.18,6168,663+0.5

Government, central administration

14,580 4.716,326 5.04,0494,407+8.8

Revenue administration

4,507 1.54,560 1.41,0401,075+3.4

Education, science, research, cultural affairs

21,472 6.923,935 7.34,3174,079 -5.5

Support for school and university students and training programme participants

3,516 1.13,977 1.29961,056+6.1

Science, research and development outside of higher education institutions

11,406 3.712,729 3.91,6541,561 -5.6

Social security, family and youth affairs, labour market policy

160,593 51.7170,486 51.845,24047,696+5.4

Social insurance including unemployment insurance

106,939 34.4111,943 34.032,83334,364+4.7

Labour market policy

34,566 11.137,057 11.38,1429,163+12.5

of which: Unemployment benefit II under Book II of the Social Code

20,349 6.621,000 6.45,2915,655+6.9

Unemployment Benefit II, government housing and heating allowances under Book II of the Social Code

5,384 1.76,500 2.01,2081,546+28.0

Family assistance, welfare services, etc.

8,065 2.68,275 2.52,0612,132+3.5

Social benefits for the consequences of war and political events

2,026 0.72,111 0.6593618+4.2

Health, environment, sport, recreation

2,074 0.72,324 0.7394436+10.8

Housing, regional planning and local community services

2,427 0.83,324 1.0580642+10.7

Housing, home ownership savings premium

1,866 0.62,378 0.7514561+9.1

Food, agriculture and forestry

900 0.31,250 0.4103114+11.3

Energy and water supply, trade and services

4,252 1.46,039 1.81,8111,528 -15.6

Regional support measures

719 0.21,585 0.53960+53.8

Mining, manufacturing and construction

1,705 0.51,546 0.51,3761,095 -20.5

Transport and communication

18,313 5.920,818 6.33,2073,448+7.5

Roads

8,660 2.89,154 2.81,0781,341+24.4

Railways and public transport

5,623 1.86,420 2.01,120932 -16.8

Financial management

35,232 11.323,117 7.09,4148,198 -12.9

Interest expenditure

17,501 5.618,471 5.67,8166,554 -16.1

Total expenditure1

310,581100.0329,100 100.083,50784,407+1.1
1 Excluding expenditure from internal offsetting.
Source: Federal Ministry of Finance.
Trends in federal expenditure by economic category

Actual

2016

Estimated

2017

Actual

Year‑on‑year

change in %
(year to date)

January to

March 2016

January to

March 2017

€m

Share
in %

€m

Share
in %

€m

Consumption expenditure

277,39889.3295,96989.977,63278,784+1.5

Personnel expenditure

30,6659.931,9889.78,3248,679+4.3

Salary payments

22,2697.223,4337.15,9186,170+4.3

Pensions

8,3962.78,5552.62,4062,509+4.3

Current material expenditure

26,1328.428,9578.85,2875,636+6.6

Non-personnel expenditure

1,5060.51,5420.5326335+2.8

Military procurement

9,9633.211,2583.41,8781,623 -13.6

Other

14,6624.716,1574.93,0833,679+19.3

Interest expenditure

17,4985.618,4625.67,8156,553 -16.1

Current grants and subsidies

202,33965.1215,72865.655,94657,608+3.0

to public administration

23,6487.626,8248.24,8174,791 -0.5

to other sectors

178,69157.5188,90457.451,13052,817+3.3

including:

       

Private enterprises

26,8788.730,0449.16,9736,888 -1.2

Pensions, assistance etc.

28,9579.329,8939.17,6188,019+5.3

Social insurance funds

112,57736.2116,87835.533,91135,576+4.9

Other asset transfers

7640.28340.3260308+18.5

Investment expenditure

33,18310.736,07111.05,8755,623 -4.3

Financial assistance

24,3587.826,0357.94,9444,392 -11.2

Grants and subsidies

22,7877.322,6396.94,4144,120 -6.7

Loans, guarantees

1,0690.31,9270.6210160 -23.8

Acquisition of holdings; capital contributions

5010.21,4690.4320113 -64.7

Fixed asset investment

8,8252.810,0373.09311,230+32.1

Construction measures

6,8462.27,5332.3646861+33.3

Acquisition of movable assets

1,4800.51,8460.6223281+26.0

Acquisition of real property

4990.26580.26389+41.3

General reduction/increase in expenditure

00.0-2,940-0.900X

Total expenditure1

310,581100.0329,100100.083,50784,407+1.1
1 Excluding expenditure from internal offsetting.
Source: Federal Ministry of Finance.

Fiscal balance

Expenditure in the first quarter of 2017 exceeded revenue by 2.8bn.

Revenue and expenditure are subject to strong fluctuations over the course of the fiscal year and thus have an uneven effect on cash funds in individual months. Net borrowing also tends to fluctuate considerably over the course of the year. This means that the fiscal balance at this point in the year and the corresponding net borrowing figures are not reliable indicators of the end-of-year figures for the fiscal balance and net borrowing.

Trends in general government tax revenue

Current-year trends in tax revenue (excluding local authority taxes)1

2017

March

Year‑on‑year
change

January to

March

Year‑on‑year
change

2017 estimates4

Year‑on‑year
change

in €m

in %

in €m

in %

in €m

in %

Joint taxes

      

Wages tax2

14,126+5.345,309+6.4195,150+5.6

Assessed income tax

14,991+14.217,009+16.754,500+1.2

Non-assessed taxes on earnings

1,676+50.03,645+20.619,220 -1.2

Final withholding tax on interest and capital gains

514+5.42,516+15.45,240 -11.8

Corporation tax

7,827+10.68,511+0.926,750 -2.5

Value added taxes (VAT)

15,925+4.157,502+5.7226,650+4.4

Trade tax apportionment

8 -7.5258+134.74,456+5.2

Increased trade tax apportionment

4+16.4180+185.73,664+1.9

Total joint taxes

55,071+9.0134,930+7.6535,630+3.7

Federal taxes

      

Energy duty

3,072+5.14,812+4.240,000 -0.2

Tobacco duty

1,235 -16.72,637 -3.114,700+3.6

Spirits duty incl. alcopops duty

125 -4.9578+2.22,050 -1.0

Insurance tax

723 -7.66,178+3.913,050+2.2

Electricity duty

722+24.61,746+3.66,530 -0.6

Motor vehicle tax

920+6.02,536+1.98,900 -0.6

Aviation tax

78+8.6190+6.51,106+3.0

Nuclear fuel duty

0X0X0X

Solidarity surcharge

2,162+11.44,324+8.717,450+3.5

Other federal taxes

100 -7.1364 -1.41,467+0.6

Total federal taxes

9,137+2.823,364+3.6105,253+0.8

Länder taxes

      

Inheritance tax

647 -16.61,641 -1.65,307 -24.3

Real property transfer tax

1,161+6.13,359+4.412,958+4.4

Betting and lottery tax

150 -1.0490+8.71,850+2.3

Beer duty

49+9.1144 -1.8667 -1.6

Other Länder taxes

150+5.7199+5.4453+2.6

Total Länder taxes

2,156 -2.35,834+2.821,235 -5.0

EU own resources

      

Customs duty

393 -11.61,224 -5.45,300+3.7

VAT-based own resources

157 -55.5591 -61.22,440 -42.6

GNI-based own resources

1,355 -26.7379 -93.621,680+8.9

Total EU own resources

1,905 -28.02,194 -74.929,420+0.5

Federation3

30,831+10.278,650+16.3305,606+5.7

Länder3

29,162+7.873,310+7.1288,292 -0.1

EU

1,905 -28.02,194 -74.929,420+0.5

Local authorities’ share of income tax and value added tax

4,858+10.911,198+11.444,100+6.7

Total tax revenue (excluding local authority taxes)

66,757+7.5165,352+6.8667,418+2.9
1 Methodology: Total cash income from the various taxes is recorded and allocated to the various government levels as stipulated by law. Actual tax amounts collected in the current month by individual government levels may differ from target amounts due to technical reasons.
2 After deduction of child benefit refunds by the Federal Central Tax Office.
3 After supplementary grants; any discrepancies with table on federal revenue are due to methodology used.
4 Source: Working Party on Tax Revenue Estimates, November 2016.

Tax revenue in March 2017

Total tax revenue (excluding local authority taxes) posted another robust year-on-year gain in March 2017, up by 7.5%. The increase in revenue from joint taxes, which rose strongly once again (by 9.0% on the year), played a particularly important role in this respect. This trend was driven by sharp increases in revenue from non-assessed taxes on earnings, wages tax and value added tax. However, revenue from assessed income tax and corporation tax also posted strong increases in March, which is usually a high-revenue month for these taxes due to the prepayment schedule. Receipts from federal taxes were up by 2.8% on the year, while revenue from Länder taxes posted a moderate decline of 2.3%.

EU own resources

Payments of own resources to the EU, including customs duties, fell by 28.0% in March 2017 compared with the same month last year. On a cumulative basis, there was a year-on-year decline of 74.9% in the first quarter of 2017, which was due to a) balances resulting from EU adjustments and amending budgets, and b) the implementation of the EU’s new Own Resources Decision. As a result, the monthly payments during the rest of the year will also be reduced. Overall, therefore, it is anticipated that Germany’s transfers of own resources to the EU will be lower this year than in 2016. Payments are subject to fluctuations over the course of the year, depending on the EU’s financing needs at any given time.

Overview of the January–March 2017 period

In the first quarter of 2017, tax receipts increased by 6.8% overall on the year. This upward trend was apparent in receipts from joint taxes (+7.6%), taxes accruing to the Federation (+3.6%), and taxes accruing to the Länder (+2.8%).

Distribution among the Federation, Länder and local authorities

The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) rose by 10.2% on the year in March 2017. This large increase was the result of lower payments of own resources to the EU and significant growth in the Federation’s share of revenue from joint taxes (+8.3%). The Länder’s tax revenue posted an increase of 7.8%, although the rise in the Länder’s share of joint taxes was offset somewhat by a slight decrease in revenue from taxes accruing to the Länder. Local authorities’ shares of receipts from joint taxes were up overall by 10.9% compared with March 2016.

Joint taxes

Wages tax

The steady upward trend in wages tax revenue in recent months continued, buoyed by the ongoing positive employment situation and rising wages. Gross revenue from this tax increased by 4.9% on the year in March 2017. Child benefit payments, which are financed from wages tax receipts and must be subtracted from this figure, increased by 3.2% over the same month last year. On balance, cash receipts from wages tax were up by 5.3% in year-on-year terms in March. In the first quarter of 2017, cash receipts from wages tax recorded a sizeable year-on-year gain of 6.4%.

Corporation tax

Gross revenue from corporation tax rose sharply by 10.5% on the year in March, a significant month for tax prepayments. This trend was influenced by rising prepayments by businesses for the current year as well as back payments resulting from assessments. Although revenue from this tax only posted cumulative growth of 0.9% in the first quarter of 2017, this was due to a baseline effect that impacted on the January result. In contrast, the current positive trend indicates that corporation tax revenue will continue to grow over the course of 2017. After deducting investment allowance payments, which are continuing to decline in volume terms, cash receipts from corporate tax recorded a year-on-year increase of 10.6% in March 2017. However, significant corporation tax refunds are still expected for 2017 due to high court rulings which have not yet had an impact on revenue (Federal Fiscal Court rulings on the STEKO case and section 40a of the Capital Investment Companies Act).

Assessed income tax

Gross revenue from assessed income tax was up by 13.2% over March 2016. The result for March, a month which is marked by high receipts due to prepayments, confirmed the revenue trend observed in previous months, which was significantly higher than the overall profit trend seen in the national accounts. Cash receipts from assessed income tax were up by 14.2% on the year in March 2017, after subtracting employee refunds, investment allowance payments and owner-occupied homes premiums. On a cumulative basis, revenue from this tax increased by 16.7% in year-on-year terms in the first quarter of 2017.

Non-assessed taxes on earnings

March 2017 saw a year-on-year increase of 21.1% in gross receipts from non-assessed taxes on earnings. Refunds by the Federal Central Tax Office, which are financed from this revenue, dropped sharply by 76.7%. On balance, cash receipts from non-assessed taxes on earnings rose by 50.0% on the year in March. It is possible that this outcome was affected by a shift in the timing of dividend payments compared with last year. In the first quarter of 2017, cumulative cash receipts from non-assessed taxes on earnings were up by 20.6% compared with the first quarter of 2016.

Final withholding tax on interest and capital gains

The trend in receipts from final withholding tax on interest and capital gains continues to be positive, with year-on-year growth of 5.4% in March 2017. The trend in recent months continues to suggest that revenue from this tax will stabilise at a lower level. The increase in March may have been the result of growth in revenue from the taxation of capital gains, given that interest rates are still very low. No reliable information can be provided on this question, however, as statistical data on the breakdown of revenue from interest and from capital gains is not available. In cumulative terms, revenue from final withholding tax on interest and capital gains rose by 15.4% on the year in the first quarter of 2017.

Value added taxes

VAT revenue once again posted tangible growth in March 2017 (+4.1%) following considerable increases in previous months. However, it should be noted that VAT revenue can display high volatility over the course of the year. Receipts from domestic VAT grew by 3.1% in year-on-year terms, while the yield from import VAT climbed by 7.0%. On a cumulative basis, revenue from value added taxes rose strongly, by 5.7% on the year, in the first quarter of 2017.

Taxes accruing to the Federation

In March 2017, revenue from taxes accruing solely to the Federation posted a 2.8% increase overall compared with the same period of last year. The individual taxes showed very different trends, however. The taxes that posted revenue increases included energy duty (+5.1%), electricity duty (+24.6%), motor vehicle tax (+6.0%) and aviation tax (+8.6%). Receipts from solidarity surcharge also climbed by 11.4% on the year, benefiting from growth in revenue from income and corporation tax (which constitutes its tax base). In contrast, receipts from tobacco duty and insurance tax were down on the year, by 16.7% and 7.6% respectively. Trends in revenue from other taxes had only a minor impact on the overall results for federal taxes. In cumulative terms, receipts from federal taxes rose by 3.6% on the year in the first quarter of 2017.

Taxes accruing to the Länder

Revenue from taxes accruing solely to the Länder fell by 2.3% in year-on-year terms in March 2017, due to a 16.6% decline in receipts from inheritance tax. Year-on-year revenue gains were also recorded for real property transfer tax (+6.1%) and fire protection tax (+5.7%). Receipts from betting and lottery tax fell slightly compared with the same period last year (-1.0%), while the yield from beer duty rose by 9.1%. In cumulative terms, receipts from Länder taxes rose by 2.8% on the year in the first quarter of 2017.

Seite teilen und Drucken (EN)