- Federal budget trends up to and including May 2019
- Trends in federal expenditure by function
- Trends in federal expenditure by economic category
- Trends in federal revenue
- Tax revenue in May 2019
- Borrowing and guarantees
Federal budget trends up to and including May 2019
|Actual 2018||2019 target||Actual1 May 2019|
|Tax revenue (€bn)||322.4||325.5||119.5|
Fiscal balance (€bn)
Financing/use of surplus
|Net borrowing5 (€bn)||0.0||0.0||-49.7|
|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 five months of the year totalled €132bn, down by 0.9% (approximately €1.2bn) on the year. Tax revenue (including transfers of EU own resources to the EU) declined by 2.2% (approximately €2.7bn), mainly due to the fact that Germany transferred around €3.7bn more in GNI-based own resources to the EU than it did in the first five months of 2018.
Other revenue was up by 13.5% (approximately €1.4bn) on the year in the January–May 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 €0.4bn higher than in the same period of 2018.
Federal expenditure in the first five months of 2019 totalled €140.7bn, up by 3.4% (roughly €4.6bn) on the year. Federal spending is separated into consumption and investment spending.
The spending increase in the January–May period was mainly due to a year-on-year rise of 2.9% (approximately €3.7bn) in consumption spending. Military procurement spending and ongoing subsidies to companies were substantially higher than in the same period last year (up by 28.0% and 10.8%, respectively). Ongoing grants to public administrations recorded a considerable rise of 4.1% on the year. In contrast, ongoing grants for pensions and benefits were 1.2% 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 €2bn (3.6%) compared with the first five months of 2018, made up the largest share of the increase in consumption spending. The 27.7% year-on-year fall in interest expenditure slowed the increase in consumption spending.
Investment spending totalled approximately €10.7bn, exceeding the May 2018 figure by 8.8%. This was driven by a 28.8% year-on-year rise in fixed asset investment. Construction spending in particular was up on the year (with a 20.8% increase in spending on federal motorway maintenance, for example).
The federal budget recorded a deficit of €8.7bn for the five-month period from January to May 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 May 2019
Total tax revenue (excluding local authority taxes) was up by 1.5% in May 2019 over the same month last year. Revenue from joint taxes was at a similar level to last year. One striking development was the sharp increase in receipts from value added taxes. Revenue from wages tax rose substantially once again. Revenue from final withholding tax on interest and capital gains also recorded another year-on-year rise, while revenue from non-assessed taxes on earnings posted a steep decline (due in turn to a high 2018 baseline). Receipts from corporation tax were also clearly down on the year. Taxes accruing solely to the Federation were up by 4.8% compared to May 2018, with receipts from taxes accruing solely to the Länder rising by 14.5%.
EU own resources
Transfers of own resources to the EU, including customs duties, totalled approximately €1.7bn in May 2019, a year-on-year drop of 3.2%. 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.
Cumulative overview of the January–May 2019 period
Total tax receipts increased by 1.9% on the year in the first five months of 2019. This upward trend was apparent in receipts from joint taxes (1.8%), taxes accruing to the Federation (1.1%), and taxes accruing to the Länder (7.7%).
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 1.8% on the year in May 2019. If this positive figure is broken down into its components, it is clear that it is the result of opposing trends. Revenue from taxes accruing solely to the Federation exceeded May 2018 levels. However, this increase was offset by a decline in receipts from the Federation’s share of revenue from joint taxes, which were down by 1.4%. While revenue from joint taxes remained stagnant, the Federation’s share of revenue from joint taxes posted a decline compared to May 2018. This drop occurred due to 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.
The Länder saw a 0.8% 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 a change in VAT revenue distribution. Furthermore, revenue from taxes accruing solely to the Länder posted a steep year-on-year increase. The local authorities’ take from joint taxes was up by 7.4% on the year.
Growth in wages tax revenue continued to be very strong in May 2019, with gross revenue from this tax increasing by 5.9% 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 4.0% on the year. 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 5.1% in May 2019. Cumulative cash receipts from wages tax were up by 5.7% on the year in the January–May 2019 period.
May is a month when corporation tax revenue tends to be low. Gross receipts from this tax fell to a negative figure, with refunds exceeding revenue by roughly €34m, compared with positive revenue of about €854m in May 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 €38m in May 2019. This result was driven by an increase in refunds following tax assessments and a simultaneous decline in back-payments. Taken cumulatively, cash receipts from corporation tax were down by 14.7% on the year in the first five 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 – which was low in absolute terms – posted a strong year-on-year gain of 14.1% in May 2019. Employee refunds increased by 9.2% on the year in May; 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 up on the year by 56.4%, to €309m, in May 2019. In cumulative terms, cash receipts from assessed income tax were down by 0.6% on the year in the first five months of 2019.
Non-assessed taxes on earnings
Gross receipts from non-assessed taxes on earnings fell by 34.5% in year-on-year terms in May 2019, following an increase of 12.3% in the previous month. Taking into account a 37.0% decline in refunds paid out by the Federal Central Tax Office, which are financed from this revenue, cash receipts from non-assessed taxes on earnings fell by 34.4%. 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 down by 4.6% on the year in the January–May period.
Final withholding tax on interest and capital gains
Revenue from final withholding tax on interest and capital gains posted an increase of 23.2% on the year in May. In cumulative terms, cash receipts from this tax were down by 41.4% on the year in the January–May 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 5.0% in May 2019. Receipts from domestic VAT rose by 5.5%, while import VAT revenue increased by 3.6%. 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 3.6% on the year in the five-month period from January to May 2019.
Taxes accruing to the Federation
In May 2019, revenue from taxes accruing solely to the Federation was 4.8% up on last year’s level. This was mainly a result of higher receipts from energy duty (up by 4.3%) and tobacco duty (up by 14.5%). Approximately €350m in revenue earned for this duty in April has been posted in this month’s results, which magnifies the figures for May. Taxes posting significant revenue growth included motor vehicle tax (up by 9.2%) and insurance tax (up by 3.5%). Gains were also posted for coffee duty (up by 25.2%) and electricity duty (up by 0.7%), while revenue from the solidarity surcharge and from alcohol duty was down on the year (by 2.9% and 15.9%, respectively). 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 increased by 14.5% on the year in May 2019, a trend that was driven by increases in revenue from real property transfer tax (20.2%), betting and lottery tax (20.8%) and inheritance tax (4.3%). Receipts from beer duty posted a year-on-year decline of 4.6% 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. In addition, receipts from fire protection tax were down on the year (-0.8%).
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|
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
|28-29 June 2019||G20 summit in Osaka, Japan|
|8–9 July 2019||Eurogroup and ECOFIN Council meetings in Brussels|
|26-27 August 2019||Meeting of German-speaking finance ministers in Luxembourg|
|13-14 September 2019||Eurogroup and informal ECOFIN meetings in Finland|
|Click here for the full schedule (only in German)|