- Federal budget trends up to and including April 2019
- Trends in federal expenditure by function
- Trends in federal expenditure by economic category
- Trends in federal revenue
- Tax revenue in April 2019
- Borrowing and guarantees
Federal budget trends up to and including April 2019
|Actual 2018||2019 target||Actual1 April 2019|
|Tax revenue (€bn)||322.4||325.5||95.8|
Fiscal balance (€bn)
Financing/use of surplus
|Net borrowing5 (€bn)||0.0||0.0||-62.9|
|Any discrepancies in totals are due to rounding.|
|1 As per accounts.|
2 With the exception of expenditure on the repayment of debt incurred on the credit market, allocations to reserves
and expenditure made to cover a cash deficit. Excluding expenditure from internal offsetting.
3 With the exception of revenue from loans on the credit market, withdrawals from reserves, revenue from cash
surpluses and seigniorage. Excluding revenue from internal offsetting.
|4 Negative values denote accumulation of reserves.|
|5 (-) debt repayment; (+) borrowing|
|Source: Federal Ministry of Finance|
Federal revenue for the first four months of the year totalled €106.5bn, down by 1.2% (approximately €1.2bn) on the year. Tax revenue (including transfers of EU own resources to the EU) declined by 2.9% (approximately €2.9bn), mainly due to the fact that Germany transferred around €3.8bn more in GNI-based own resources to the EU than it did in the first four months of 2018. The Federation’s share of joint taxes exceeded the 2018 level by 1.2% (roughly €1bn).
Other revenue was up by 18.2% (approximately €1.7bn) on the year in the January–April period. This was mainly due to an increase in allocations from the Bundesbank’s profits – allocations so far this year have totalled €2.4bn, an increase of approximately €0.5bn on the year. Revenue from the profits of government undertakings and holdings was approximately €0.6bn higher than in the same period of 2018.
Federal expenditure in the first four months of 2019 totalled €115.4bn, up by 3.2% (roughly €3.6bn) on the year. Federal spending is separated into consumption and investment spending.
The spending increase in the January–April period was mainly due to a year-on-year rise of 3.0% (approximately €3.2bn) in consumption spending. Military procurement spending and ongoing subsidies to companies were substantially higher than in the same period last year (up by 10.7% and 10.0%, respectively). Ongoing grants to public administrations recorded a considerable rise of 5.6% on the year. In contrast, ongoing grants for pensions and benefits were 1.1% lower than in the same period last year, mainly as a result of a 3.0% fall in spending on basic income support for jobseekers. In absolute year-on-year terms, subsidies to social security funds, which were up by about €1.7bn (3.6%) compared with the first four months of 2018, made up the largest share of the increase in consumption spending. The 20.9% year-on-year fall in interest expenditure slowed the increase in consumption spending.
Investment spending totalled approximately €8.5bn, exceeding the April 2018 figure by 5.0%. This was driven by a 32.2% year-on-year rise in fixed asset investment. Construction spending in particular was up on the year (with a 31.5% increase in spending on federal motorway maintenance, for example).
Investment spending totalled roughly €5.9bn, nearly the same as in April 2018.
The federal budget recorded a deficit of €8.8bn for the four-month period from January to April 2019.
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 federal expenditure by function
Trends in federal expenditure by economic category
Trends in federal revenue
Tax revenue in April 2019
Total tax revenue in April 2019 (excluding local authority taxes) was up by 2.6% over the same month last year. Revenue from joint taxes rose by 4.4%. One striking development was the high increase in receipts from value added taxes. Revenue from wages tax rose substantially once again. Receipts from non-assessed taxes on earnings also recorded considerable gains. In contrast, revenue from assessed income tax and from corporation tax declined. The yield from final withholding tax on interest and capital gains continued its sharp downwards trend. Revenue from taxes accruing to the Federation was down by 2.3% on the year, while taxes accruing to the Länder declined by 7.9%.
EU own resources
Transfers of own resources to the EU, including customs duties, totalled approximately €1.9bn in April 2019, a year-on-year drop of 16.7%. Transfers to the EU are based on the planned financial framework for 2019. The overall volume of the 2019 budget is higher than that of the 2018 budget. In addition, monthly fluctuations occur over the course of the year based on the EU’s financing needs at any given time.
Overview of the January–April 2019 period
Total tax receipts increased by 2.0% on the year in the first five months of 2019. This upward trend was reflected in receipts from joint taxes (up by 2.2%), taxes accruing to the Federation (up by 0.1%), and taxes accruing to the Länder (up by 6.2%).
Distribution among the Federation, Länder and local authorities
The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) were up by 4.3% on the year in April 2019. If this positive figure is broken down into its components, it is clear that it is the result of opposing trends. On the one hand, revenue from taxes accruing solely to the Federation was lower than in April 2018. On the other hand, this decline was offset by a 3.6% increase in the Federation’s share of revenue from joint taxes, despite the fact that the Federation’s share of revenue from value added taxes was reduced under legislation adopted in late 2018 which (a) extended federal support for the Länder and local authorities to help them pay for refugee-related costs, and (b) adjusted revenue distribution arrangements between the Federation and Länder following the financial closure of the German Unity Fund. As a result of this change, the Federation did not benefit from the increase in VAT revenue to the same extent as the Länder. The fact that transfers of EU own resources from the federal budget were about €0.4bn lower than in April 2018 also had a positive effect on the Federation’s results.
The Länder saw a 2.5% rise in tax revenue. This gain was based on higher yields from the share of joint taxes allocated to the Länder, partly as a result of the above-mentioned change in VAT revenue distribution. In contrast, the decline in revenue from taxes accruing solely to the Länder had a negative effect on the overall result for the Länder. The local authorities’ take from joint taxes was up by 5.9% on the year.
Growth in wages tax revenue continued to be very strong in April 2019, with gross revenue increasing by 4.9% on the year. This reflected continuing employment growth and rising incomes in Germany. Child benefit payments – which are financed from wages tax receipts – increased by 1.9% on the year in April 2019. However, it should be noted that the 2018 baseline was understated as a result of statistical problems. On balance, cash receipts from wages tax saw a year-on-year rise of 5.5% in April 2019. Cumulative cash receipts from wages tax were up by 5.8% on the year in the first four months of 2019.
April is a month when corporation tax revenue tends to be relatively low. Gross receipts from this tax fell to a negative figure, with refunds exceeding revenue by roughly €41m, compared with positive revenue of about €406m in April 2018. Investment allowance payments are deducted from the gross receipts, although their impact is only marginal at this point. The resulting cash receipts from corporation tax stood at €43m in April 2019. Taken cumulatively, cash receipts from corporation tax were down by 6.9% on the year in the first four months of 2019.
Assessed income tax
As with corporation tax, the trend in receipts from assessed income tax was driven by ongoing tax assessment activities. Gross revenue from assessed income tax posted a strong year-on-year gain of 7.0% in April 2019. Employee refunds increased by 15.9% on the year in April; after these are subtracted from the gross figure (along with investment allowance payments and owner-occupied homes premiums, which are insignificant in terms of amount), net cash receipts from assessed income tax were down by 2.5% on the year in April 2019. In cumulative terms, cash receipts from assessed income tax were down by 1.2% on the year in the first four months of 2019.
Non-assessed taxes on earnings
Gross receipts from non-assessed taxes on earnings rose by 12.3% in year-on-year terms in April 2019, following a decline of 24.6% in the previous month. Taking into account a 51.2% increase in refunds paid out by the Federal Central Tax Office, which are financed from this revenue, cash receipts from non-assessed taxes on earnings rose by 11.5%. Overall, the trend in revenue from non-assessed taxes on earnings tends to be very volatile over the course of the year, reflecting dividend distribution dates. The cumulative result provides a more solid basis for analysis: Cumulative cash receipts from non-assessed taxes on earnings were up by 12.8% on the year in the first four months of 2019.
Final withholding tax on interest and capital gains
Revenue from final withholding tax on interest and capital gains once again posted a sharp decline, falling by 23.2% on the year in April. In cumulative terms, cash receipts from this tax were down by 48.1% on the year in the January–April 2019 period. There are no statistics breaking down this figure into its two components, but it can be assumed that capital gains made a significantly smaller contribution to overall revenue from this tax than in 2018.
Value added taxes (VAT)
Receipts from value added taxes posted a substantial year-on-year gain of 7.6% in April 2019. Receipts from domestic VAT rose by 7.7%, while import VAT revenue increased by 7.5%. The take from VAT tends to be very volatile over the course of any given year. Cumulative cash receipts from value added taxes were up by 3.2% on the year in the four-month period from January to April 2019.
Taxes accruing to the Federation
In April 2019, revenue from taxes accruing solely to the Federation was 2.3% below last year’s level. This was mainly a result of lower receipts from energy duty (down by 9.9%) and electricity duty (down by 10.8%). Taxes posting significant revenue growth included motor vehicle tax (up by 15.1%) and tobacco duty (up by 4.3%). Gains were also posted for insurance tax (up by 3.5%) and solidarity surcharge (up by 1.8%). Trends in revenue from other taxes had only a minor impact on the overall results for taxes accruing to the Federation.
Taxes accruing to the Länder
Revenue from taxes accruing solely to the Länder declined by 7.9% on the year in April 2019. This is attributable to a 39.2% drop in inheritance tax receipts (due in turn to a high 2018 baseline) as well as a 12.6% fall in revenue from beer duty (due to ongoing refunds triggered by the European Court of Justice’s judgement of 17 May 2018 (C-30/17) on flavoured beer and mixed beverages containing beer). Revenue gains were recorded for real property transfer tax (up by 16.2%), fire protection tax (up by 9.1%) and betting and lottery tax (up by 15.6%).
Borrowing and guarantees
as of 31 March 2019
as of 31 March 2018
|Export credit guarantees||148.0||118.8||119.5|
|Loans to foreign debtors, foreign direct investment, EIB loans||58.0||44.2||42.9|
|Financial cooperation projects||28.5||23.6||20.3|
|International financial institutions||80.0||60.1||60.1|
|Treuhandanstalt successor organisations||1.0||1.0||1.0|
|Interest compensation guarantees||15.0||15.0||15.0|
|Monthly report||Reporting period||Publication date|
June 2019 issue
|May 2019||20 June 2019|
July 2019 issue
|June 2019||22 July 2019|
August 2019 issue
|July 2019||22 August 2019|
September 2019 issue
|August 2019||20 September 2019|
October 2019 issue
|September 2019||21 October 2019|
November 2019 issue
|October 2019||21 November 2019|
December 2019 issue
|November 2019||20 December 2019|
1 In accordance with the IMF’s Special Data Dissemination Standard Plus (SDDS Plus); see http://dsbb.imf.org
Source: Federal Ministry of Finance
|8–9 June 2019||Meeting of G20 finance ministers and central bank governors in Fukuoka, Japan|
|13–14 June 2019||Eurogroup and ECOFIN Council meetings in Luxembourg|
|28-29 June 2019||G20 summit in Osaka, Japan|
|8–9 July 2019||Eurogroup and ECOFIN Council meetings in Brussels|
|Click here for the full schedule (only in German)|