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21 February 2020

Overview of fed­er­al bud­getary and fi­nan­cial da­ta up to and in­clud­ing Jan­uary 2020

Translated extracts from the Federal Ministry of Finance’s February 2020 monthly report.

Federal budget trends up to and including January 2020

Table: Trends in the federal budget

Expenditure (€bn)2

343.2

362.0

40.5

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

 

 

+0.3

Revenue (€bn)3

356.5

351.0

20.5

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

 

 

-1.2

Tax revenue (€bn)

329.0

325.0

18.2

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

 

 

-4.7

Balance of pass-through funds (€bn)

0.0

0.0

0.0

Fiscal balance (€bn)

13.3

-11.0

-20.0

Financing/use of surplus:

-13.3

11.0

20.0

Cash resources (€bn)

-

-

79.5

Seigniorage (€bn)

0.2

0.3

0.0

Movements in reserves4 (€bn)

-13.5

10.6

0.0

Net borrowing5 (€bn)

0.0

0.0

-59.5

Any discrepancies in totals are due to rounding.
1As per accounts.
2With 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.
3With the exception of revenue from loans on the credit market, withdrawals from reserves, revenue from cash surpluses and seigniorage. Excluding revenue from internal offsetting.
4Negative values denote accumulation of reserves.
5(-) debt repayment; (+) borrowing
Source: Federal Ministry of Finance

Actual 2019

2020 target

Actual1

January 2020

Revenue

Federal revenue in January 2020 totalled €20.5bn, down by 1.2% (€0.2bn) on the year. Tax revenue (including transfers of EU own resources to the EU) declined by 4.7% (€0.9bn), mainly due to the fact that Germany transferred approximately €2.0bn more in GNI-based resources to the EU than it did in the same month last year.

Other revenue was 39.5% (€0.6bn) higher than in January 2019. This was primarily due to the administrative fines paid to the Federal Cartel Office in January.

Expenditure

Federal expenditure in January 2020 totalled €40.5bn, up by 0.3% (€0.1bn) on the year. Federal spending is separated into consumption and investment spending. Consumption spending was 2.4% higher in January 2020 than in the same month of 2019. A key contributing factor were the grants for the phase-out of subsidised coal mining (up by €1.0bn), which fell due in January.

Ongoing grants to public administrations were roughly €399m lower than in January 2019. This is partly because, as of 1 January 2020, the Federation no longer needs to pay compensation payments to the Länder in relation to the phasing-out of federal assistance for the promotion of social housing. This will reduce the total level of federal grants to public administrations by €1.5bn in 2020.

Interest expenditure in January 2020 saw a sharp year-on-year decline of 13.2%. Investment spending by the end of January 2020 stood at €2.5bn, a significant year-on-year decline of 22.8%. This is partly attributable to the discontinuation of compensation payments to the Länder, but also to the fact that planned investment grants and subsidies had not yet been drawn down in January.

Fiscal balance

The federal budget recorded a deficit of €20.0bn for January 2020.

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 any given 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.

This is especially true towards the start of the year.

Trends in federal expenditure by function

Trends in federal expenditure by function

Trends in federal expenditure by economic category

Trends in federal expenditure by economic category

Trends in federal revenue

Trends in federal revenue

Tax revenue in January 2020

2020 trends in tax revenue (excluding local authority taxes)

Total tax revenue (excluding local authority taxes) in January 2020 rose by 7.7% on the year. This was driven by significantly higher receipts from joint taxes (up by 7.3%). Corporation tax and assessed income tax posted particularly high revenue growth. The yield from final withholding tax on interest and capital gains and from non-assessed taxes on earnings was also significantly higher than in January 2019. The revenue from wages tax increased, as well. In contrast, receipts from value added taxes posted only moderate growth. The yield from taxes accruing solely to the Federation rose significantly on the year. Revenue from taxes accruing to the Länder surged by 10.3%.

EU own resources

Transfers of own resources to the EU, including customs duties, totalled approximately €4.8bn in January 2020, a year-on-year increase of 92.1%. To finance its tasks, the European Commission drew down an additional twelfth of the amount earmarked for the entire year in January 2020. In other words, two twelfths of the annual amount were transferred in January 2020, resulting in a significant year-on-year rise in transfers of BNI-based and VAT-based own resources to the EU. Monthly fluctuations occur over the course of the year based on the EU’s financing needs at any given time.

Distribution among the Federation, Länder and local authorities

The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) posted a significant year-on-year decline of 4.9% in January 2020. On the face of it, the Federation’s tax receipts increased significantly. Revenue from taxes accruing solely to the Federation was up by 10.2% on the year, and the Federation’s share of joint taxes also recorded a significant rise of 5.4%, thanks to the high receipts from joint taxes. However, the reorganisation of the fiscal equalisation system, which came into effect on 1 January 2020, changed the distribution of VAT revenue to the Federation’s disadvantage. As a result, the Federation’s share of VAT revenue declined by 2.9%, and the Federation also had to pay significantly higher supplementary federal grants to the Länder in January 2020. Moreover, transfers of own resources to the EU were also considerably higher in January 2020 than in the same month last year.

Länder tax receipts were up by 9.3% on the year in January 2020. This was due mainly to higher yields from the share of joint taxes allocated to the Länder, which were up by 9.2% on the year. Receipts from taxes that accrue only to the Länder were also up markedly on the year in January, by 10.3%. Local authorities’ take from their share of joint taxes was 7.3% higher than in January 2019.

Joint taxes

Wages tax

Wages tax receipts continued to grow in January 2020, with gross revenue increasing by 4.5% on the year. Child benefit payments, which are financed from wages tax receipts, rose by 4.7% on the year due to a €10 per child increase in monthly child benefit that came into effect in July 2019. On balance, cash receipts from wages tax increased by 4.4% on the year in January 2020.

Corporation tax

Gross receipts from corporation tax stood at approximately €1.1bn in January 2020, a substantial increase on the €0.3bn taken in the same month last year. This rise can be attributed primarily to back payments for past tax assessment periods. In addition, retroactive prepayments were also up sharply. Taxpayer paybacks of investment allowance slightly exceeded payouts in January. However, this had only a negligible impact on results. On balance, cash receipts rose on the year in January 2020 to reach €1.1bn.

Assessed income tax

Gross receipts from assessed income tax posted a substantial year-on-year increase of 24.6% in January 2020. This trend can be attributed primarily to a rise in retroactive prepayments. The balance between back-payments and refunds also improved.

Employee refunds were down by 4.8% on the year in January; 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 increased by 46.8% year-on-year in January 2020.

Non-assessed taxes on earnings

January 2020 saw a 24.1% year-on-year rise in gross receipts from non-assessed taxes on earnings. Refunds by the Federal Central Tax Office, which are financed from this revenue, increased to approximately €75m. As a result, cash receipts from non-assessed taxes on earnings grew by 21.4% on the year.

Final withholding tax on interest and capital gains

Revenue from final withholding tax on interest and capital gains posted a year-on-year rise of 41.8% in January 2020. There are no statistics breaking down this figure into its two components, but it can be assumed that the rise is attributable to the contribution made by capital gains.

Value added taxes

Receipts from value added taxes were up by only 0.7% on the year in January 2020. Revenue from domestic VAT fell slightly, by 0.1% in year-on-year terms, while receipts from import VAT grew by 3.5%.

Federal taxes

In January 2020, revenue from taxes accruing solely to the Federation was 10.2% higher than in January 2019. Receipts from tobacco duty recorded a particularly strong surge of 86.0%, due to a revenue shift from December 2019 to January 2020 attributable to accounting technicalities. Receipts from the solidarity surcharge climbed by 11.0% on the year thanks to growth in revenues from income and corporation tax (which constitute its tax base). Revenue gains were also posted for motor vehicle tax (up by 7.1%), energy duty (up by 4.2%) and insurance tax (up by 5.4%). Drops in yields were recorded for aviation tax (down by 27.9%) and alcohol duty (down by 8.3%). Trends in revenue from other taxes had only a minor impact on the overall results for federal taxes.

Taxes accruing to the Länder

Revenue from taxes accruing solely to the Länder increased significantly in January 2020, by 10.3% on the year. This was mainly due to substantial growth in revenue from real property transfer tax (up by 8.5%) and inheritance tax (up by 21.1%). The yield from fire protection tax increased by 4.1%, while receipts from betting and lottery tax were up by 5.7%. Revenue from beer duty was down by 22.6% on the year.

Borrowing and guarantees

Debt trends for the Federation and its special funds (in €m)

Guarantees
 

Authorised amount

Amount allocated
as of

31 December 2019

Amount allocated
as of

31 December 2018

in € bn

Export credit guarantees

148.0

119.4

120.7

Loans to foreign debtors, foreign direct investment, EIB loans

58.0

42.8

42.7

Financial cooperation projects

28.5

25.6

22.8

Food stockpiling

0.7

0.0

0.0

Domestic guarantees

125.0

115.8

104.7

Calendar

Publication schedule1 of the monthly reports 
Monthly reportReporting periodPublication date
March 2020 issueFebruary 202020 March 2020
April 2020 issueMarch 202021 April 2020
May 2020 issueApril 202022 May 2020
June 2020 issueMay 202019 June 2020
July 2020 issueJune 202021 July 2020
August 2020 issueJuly 202020 August 2020
September 2020 issueAugust 202022 September 2020
October 2020 issueSeptember 202022 October 2020
November 2020 issueOctober 202020 November 2020
December 2020 issueNovember 202022 December 2020
Key dates on the fiscal and economic policy agenda
22–23 February 2020

 

Meeting of G20 finance ministers and central bank governors in Riyadh, Saudi Arabia

16–17 March 2020

Eurogroup and ECOFIN Council meetings in Brussels

16–17 April 2020

Meeting of G20 finance ministers and central bank governors in Washington, D.C.

17–19 April 2020

Spring meetings of the IMF and World Bank in Washington, D.C.

24–25 April 2020

Eurogroup and informal ECOFIN meetings in Zagreb, Croatia

18–19 May 2020

 

Eurogroup and ECOFIN Council meetings in Brussels