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Any discrepancies in totals are due to rounding. ¹ Including full implementation of the second supplementary budget for 2021 that was adopted by the German Bundestag on 27 January 2022. ² As per accounts. ³ 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. ⁴ 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. ⁵ Negative values denote accumulation of reserves. ⁶ (-) debt repayment; (+) borrowing. Source: Federal Ministry of Finance
Actual¹ 2021
Actual² January 2022
Until the 2022 budget has been adopted by the German Bundestag and promulgated in the Federal Law Gazette, the German government is working on the basis of an interim budget, which is based primarily on Article 111 of the Basic Law (see the article “Vorläufige Haushaltsführung 2022” (“2022 Interim Budget Management”) in the German version of the January 2022 monthly report). Given that the targets for the 2022 federal budget have not been determined, no target values are included in the following tables.
Federal revenue in January 2022 totalled approximately €22.8bn, up by 33.2% (about €5.7bn) on the year. Tax receipts (taking into account transfers of own resources to the EU) increased by 37.9% (roughly €5.8bn) on the year. The yield from value added taxes was up by 58.2% (about €4.2bn) on the year. Revenue from income tax and corporation tax was up by 12.9% (approximately €1.0bn). Receipts from the solidarity surcharge were down by 47.7% (about €0.6bn). Payments to the EU (GNI-based own resources and VAT-based own resources) were down by about €1.1bn on the year, which also contributed to the increase in tax revenue.
Other revenue recorded a year-on-year drop of 6.8% (approximately €0.1bn), which can be attributed primarily to lower revenue from grants from EU funds.
Federal expenditure in January 2022 totalled €45.4bn, down by 16.3% (approximately €8.8bn) on the year. A breakdown by economic category shows that the lower spending was primarily the result of a drop in consumption spending, which was down by 13.8% (about €6.7bn). Ongoing grants to social security funds declined by 19.9% (approximately €5.3bn). A one-off €3.0bn disbursement to the health fund’s liquidity reserves was made in January 2021 for a programme to future-proof hospitals. In addition, disbursements to the health fund to cover pandemic-related costs were €2.6bn lower in 2022 than in 2021. Subsidies to businesses fell by 37.8% (about €1.8bn) on the year. Assistance to businesses affected by the fallout from the coronavirus pandemic amounted to roughly €0.5bn in January 2022.
Investment spending totalled approximately €3.3bn in January 2022, 38.5% (about €2.1bn) below last year’s level. However, last year’s figure was distorted by the liquidity assistance provided to the Federal Employment Agency, which was converted into a subsidy following closure of the 2021 federal budget. Fixed asset investment was approximately €0.1bn below last year’s level.
The federal budget recorded a deficit of €22.6bn in January 2022.
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 (the difference between gross borrowing and gross repayments) also tends to fluctuate strongly 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.
Trends in federal expenditure by function
Trends in federal expenditure by function
General public services
100,399
18.0
8,350
8,215
-1.6
Economic cooperation and development
13,224
2.4
1,226
1,181
-3.7
Defence
46,550
8.4
3,823
3,827
+0.1
Government, central administration
20,576
3.7
1,903
1,896
-0.4
Revenue administration
5,981
1.1
455
467
+2.6
Education, science, research, cultural affairs
28,985
5.2
1,350
942
-30.2
Support for school and university students and training programme participants
4,912
0.9
521
406
-22.1
Science, research and development outside of higher education institutions
16,259
2.9
560
271
-51.6
Social security, family affairs and youth, labour market policy
281,133
50.5
37,227
28,182
-24.3
Social security funds including unemployment insurance
147,057
26.4
23,836
19,368
-18.7
of which:
General pension insurance
97,343
17.5
14,743
15,027
+1.9
Health insurance
18,887
3.4
4,208
1,225
-70.9
Unemployment insurance
16,935
3.0
2,888
1,178
-59.2
Labour market policy
42,109
7.6
3,353
3,077
-8.3
of which:
Basic income support for jobseekers under Book II of the Social Code
21,748
3.9
1,994
1,884
-5.5
Government housing and heating allowances under Book II of the Social Code
10,090
1.8
719
559
-22.3
Family assistance, welfare services, etc.
11,038
2.0
933
962
+3.1
Social benefits for the consequences of war and political events
2,159
0.4
389
352
-9.5
Other social affairs
67,506
12.1
7,915
3,372
-57.4
Health, environment, sport, recreation
16,959
3.0
1,287
2,105
+63.6
Housing, urban development, regional planning and local community services
2,270
0.4
60
90
+50.0
Housing, home ownership savings premium
1,320
0.2
50
88
+75.2
Food, agriculture and forestry
1,953
0.4
49
76
+54.3
Energy and water management, trade and services
5,705
1.0
789
780
-1.1
Regional support measures
1,796
0.3
1
26
X
Mining, manufacturing and construction
801
0.1
285
285
-0.1
Transport and communication
29,781
5.4
1,054
1,428
+35.4
Roads
8,451
1.5
88
386
+339.9
Railways and public transport
14,139
2.5
440
606
+37.8
Financial management
89,432
16.1
4,054
3,585
-11.6
Real property and capital assets, special funds and financial grants
84,467
15.2
201
214
+6.5
Interest expenditure and borrowing-related expenditure
3,881
0.7
3,756
3,295
-12.3
Total expenditure²
556,617
100.0
54,218
45,403
-16.3
¹ Including full implementation of the second supplementary budget for 2021 that was adopted by the German Bundestag on 27 January 2022. 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. Source: Federal Ministry of Finance
Trends in federal expenditure by economic category
Trends in federal expenditure by economic category
Consumption expenditure
510,835
91.8
48,837
42,093
-13.8
Human resources expenditure
36,498
6.6
3,936
4,031
+2.4
Salary payments
27,237
4.9
2,852
2,912
+2.1
Pensions
9,261
1.7
1,084
1,119
+3.2
Operating expenditure
38,670
6.9
1,965
1,877
-4.5
Maintenance of immovable property
1,083
0.2
40
54
+35.0
Military procurement
17,068
3.1
745
616
-17.3
Other
20,518
3.7
1,181
1,207
+2.2
Interest expenditure
3,855
0.7
3,756
3,294
-12.3
Ongoing grants and subsidies
427,989
76.9
38,845
32,595
-16.1
to public administrations
117,438
21.1
2,770
3,392
+22.5
to other areas
310,551
55.8
36,075
29,204
-19.0
of which:
Companies
83,683
15.0
4,717
2,935
-37.8
Pensions, benefits, etc.
32,557
5.8
3,042
2,962
-2.6
Social security funds
172,478
31.0
26,816
21,483
-19.9
Other asset transfers
3,824
0.7
334
295
-11.7
Investment expenditure
45,782
8.2
5,381
3,310
-38.5
Financial assistance
39,321
7.1
5,070
3,131
-38.2
Grants and subsidies
33,788
6.1
1,743
1,539
-11.7
Loans, guarantees
2,363
0.4
3,327
1,592
-52.1
Acquisition of holdings; capital contributions
3,170
0.6
0
0
+0.0
Fixed asset investment
6,461
1.2
312
179
-42.6
Construction projects
3,920
0.7
151
78
-48.3
Acquisition of movable assets
2,453
0.4
153
103
-32.7
Acquisition of real property
88
0.0
8
-2
X
General reduction/increase in expenditure
0
0.0
0
0
X
Total expenditure²
556,617
100.0
54,218
45,403
-16.3
¹ Including full implementation of the second supplementary budget for 2021 that was adopted by the German Bundestag on 27 January 2022. 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. Source: Federal Ministry of Finance
Income tax and corporation tax
(incl. final withholding tax on interest and capital gains)
162,587
47.7
8,123
9,168
+12.9
of which:
Wages tax
92,671
27.2
5,490
6,280
+14.4
Assessed income tax
30,746
9.0
686
856
+24.8
Non-assessed tax on earnings
13,695
4.0
753
873
+15.9
Final withholding tax on interest and capital gains
4,413
1.3
435
408
-6.2
Corporation tax
21,062
6.2
759
751
-1.1
Value added taxes
113,126
33.2
7,182
11,363
+58.2
Trade tax apportionment paid to Federation and Länder
2,082
0.6
58
81
+39.7
Energy duty
37,120
10.9
332
391
+17.8
Tobacco duty
14,733
4.3
598
538
-10.0
Solidarity surcharge
11,028
3.2
1,274
666
-47.7
Insurance tax
14,980
4.4
843
818
-3.0
Electricity duty
6,691
2.0
585
629
+7.5
Motor vehicle tax
9,546
2.8
864
883
+2.2
Alcohol duty including alcopops duty
2,084
0.6
44
178
+304.5
Coffee duty
1,058
0.3
102
102
+0.0
Aviation tax
566
0.2
10
62
+520.0
Sparkling wine duty and intermediate products duty
363
0.1
2
26
+1,200.0
Other taxes accruing to the Federation
2
0.0
0
0
+0.0
Deductions
Consolidation assistance for the Länder
800
X
0
0
+0.0
Supplementary grants to Länder
10,071
X
0
0
+0.0
EU own resources (GNI-based)
28,683
X
3,402
2,388
-29.8
EU own resources (VAT-based)
4,416
X
480
395
-17.7
Grants to Länder for public transport
9,458
X
772
944
+22.3
Grants to Länder for motor vehicle tax and HGV toll
8,992
X
0
0
+0.0
Other revenue
27,472
8.1
1,785
1,663
-6.8
Revenue from economic activity
5,342
1.6
25
34
+36.0
Interest revenue
346
0.1
28
66
+135.7
Loan repayments, holdings, privatisation proceeds
1,304
0.4
96
64
-33.3
Total revenue²
341,017
100.0
17,147
22,840
+33.2
¹ Including full implementation of the second supplementary budget for 2021 that was adopted by the German Bundestag on 27 January 2022. ² 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.
Source: Federal Ministry of Finance
2022 trends in tax revenue (excluding local authority taxes)
2022 trends in tax revenue (excluding local authority taxes)¹
Joint taxes
Wages tax²
19,945
+10.6
19,945
+10.6
230,800
+5.7
Assessed income tax
2,019
+25.0
2,019
+25.0
65,050
-10.1
Non-assessed taxes on earnings
1,837
+13.0
1,837
+13.0
23,450
-14.4
Final withholding tax on interest and capital gains
(including the former withholding tax on interest income)
926
-6.3
926
-6.3
8,300
-17.2
Corporation tax
1,502
-1.1
1,502
-1.1
38,950
-7.5
Value added taxes
23,523
+48.0
23,523
+48.0
270,750
+8.0
Trade tax apportionment paid to Federation and Länder
270
+415.4
270
+415.4
5,005
+1.1
Increased trade tax apportionment
0
X
0
X
0
X
Total joint taxes
50,023
+25.9
50,023
+25.9
642,305
+2.6
Taxes accruing to the Federation
Energy duty
391
+17.8
391
+17.8
38,450
+3.6
Tobacco duty
538
-9.9
538
-9.9
15,420
+4.7
Alcohol duty
177
+300.1
177
+300.1
2,130
+2.0
Insurance tax
818
-3.0
818
-3.0
15,350
+2.5
Electricity duty
629
+7.4
629
+7.4
6,670
-0.3
Motor vehicle tax
883
+2.2
883
+2.2
9,520
-0.3
Aviation tax
62
+513.2
62
+513.2
1,140
+101.5
Solidarity surcharge
666
-47.7
666
-47.7
10,400
-5.7
Other taxes accruing to the Federation
129
+23.6
129
+23.6
1,449
+2.2
Total taxes accruing to the Federation
4,292
-7.8
4,292
-7.8
100,529
+2.4
Taxes accruing to the Länder
Inheritance tax
900
+44.4
900
+44.4
9,350
-4.8
Real property transfer tax
1,588
+10.9
1,588
+10.9
18,550
+1.2
Betting and lottery tax
259
+28.8
259
+28.8
2,535
+8.7
Beer duty
47
+20.8
47
+20.8
618
+5.8
Other taxes accruing to the Länder
27
+10.4
27
+10.4
548
+2.1
Total taxes accruing to the Länder
2,822
+21.6
2,822
+21.6
31,601
-0.0
EU own resources
Customs duties
422
+33.0
422
+33.0
5,150
+0.5
VAT-based own resources
395
-17.8
395
-17.8
4,740
+7.3
GNI-based own resources
2,388
-29.8
2,388
-29.8
30,340
+5.8
Total EU own resources
3,205
-23.7
3,205
-23.7
41,620
+8.9
Federation³
21,931
+36.3
21,931
+36.3
328,364
+4.7
Länder³
28,347
+23.1
28,347
+23.1
356,423
+0.4
EU
3,205
-23.7
3,205
-23.7
41,620
+8.9
Local authorities’ share of income tax and value added tax
4,075
+10.5
4,075
+10.5
53178
-1.5
Total tax revenue (excluding local authority taxes)
57,559
+22.4
57,559
+22.4
779,585
+2.4
¹ Methodology: Total cash income from the various taxes is recorded and allocated to the various government levels as stipulated by law. Tax amounts actually received in the current month by individual government levels may differ from the target amounts for technical reasons.
² After deduction of child benefit refunds by the Federal Central Tax Office.
³ After supplementary grants; any discrepancies with the table on trends in federal revenue are due to the methodology used (see footnote 1).
⁴ Results of the Working Party on Tax Revenue Estimates of November 2021.
Source: Federal Ministry of Finance
Total tax revenue (excluding local authority taxes) was up by 22.4% on the year in January 2022. This can largely be attributed to the 25.9% year-on-year rise in revenue from joint taxes. Value added taxes recorded an unusually large revenue increase. However, this is primarily attributable to the low 2021 baseline, which was a result of (a) the deferred deadline for paying import VAT and (b) the temporary cut in VAT rates in the second half of 2020. Wages tax, assessed income tax and non-assessed taxes on earnings also posted significant year-on-year revenue growth. Receipts from federal taxes in January 2022 fell by 7.8% on the year, primarily as a result of the sharp decline in revenue from the solidarity surcharge. In contrast, receipts from taxes accruing to the Länder grew by 21.6%, with all taxes in this category posting significant revenue gains.
Transfers of own resources to the EU, including customs duties, were down by about €1.0bn (23.7%) on the year in January 2022. In general, monthly requisitions are based on the annual EU budget that is in force for the respective year. However, depending on the EU’s financing needs at any given time, such requisitions can be subject to fluctuations, for example when amending budgets take effect.
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 36.3% on the year in January 2022. The Federation’s take from joint taxes grew by 30.1%. This was higher than the 25.9% increase in overall revenue from joint taxes. The discrepancy is due to the fact that the Federation’s take from its share of VAT revenue increased by 58.0%, even though overall VAT revenue posted a somewhat smaller increase of 48.0%. Under section 1 (1) of the Fiscal Equalisation Act (Finanzausgleichgesetz), the Federation receives 52.81% of overall VAT revenue. This share is subsequently reduced by annual fixed amounts that the Federation allocates to the Länder and local authorities. Because the amounts of these allocations are fixed for a given year, this means that when VAT revenue goes up, the Federation’s share of VAT revenue goes up as well. Moreover, the amounts of the allocations from the Federation to the Länder and local authorities were lower than they were in January 2021. Other trends in January 2022: revenue from taxes accruing solely to the Federation was down by 7.8% on the year. Supplementary federal grants to the Länder increased, as did federal subsidies to the Länder for public transport. Meanwhile, federal transfers of own resources to the EU were down on the year (see above).
Länder tax receipts also posted a strong year-on-year gain of 23.1% in January 2022. Due to the mechanism for distributing VAT revenue described above, the Länder posted lower rates of growth for VAT revenue (up by 42.2%) and revenue from joint taxes (up by 25.0%) than the Federation. Moreover, the yield from taxes that accrue exclusively to the Länder rose significantly, by 21.6%, while supplementary federal grants to the Länder increased by 4.0% and federal subsidies to the Länder for public transport rose by 22.3%.
Local authorities’ take from their share of joint taxes was 10.5% higher than in the same period last year. Local authorities’ revenue from value added taxes rose by only 7.4%, due to the significantly lower fixed amount of allocations from the Federation.
Gross revenue from wages tax was up by 9.0% in year-on-year terms in January 2022. This upward trend primarily reflects the marked improvement in labour market conditions compared with January 2021. Child benefit payments – which are financed from wages tax receipts – rose by 1.2% on the year. Overall, cash receipts from wages tax posted a year-on-year gain of 10.6% in January 2022.
Gross receipts from corporation tax recorded a slight year-on-year fall of 1.0% in January 2022. Research and investment allowances were financed from this amount. On balance, these payments totalled approximately €1.8m and thus had only a minimal impact on cash receipts from corporation tax. Cash receipts from corporation tax were down by 1.1% on the year in January 2022.
Gross revenue from assessed income tax was up by 11.5% on the year in January 2022. Employee refunds (which are subtracted from the gross figure) were down by 22.6% on the year. Investment allowance payments, research allowance payments and owner-occupied homes premiums, which are insignificant in terms of amount, are also subtracted from the gross figure. On balance, cash receipts from assessed income tax were up by 25.0% on the year in January 2022.
Gross receipts from non-assessed taxes on earnings recorded a 5.1% year-on-year rise in January 2022. Refunds by the Federal Central Tax Office, which are financed from gross revenue, totalled about €13m (down by 90.5% on the year). Overall, cash receipts from non-assessed taxes on earnings were up by 13.0% in January 2022 compared with the same month last year.
Revenue from value added taxes was up by 48.0% on the year in January 2022. Receipts from domestic VAT grew by 11.7% on the year. As a result of the long-term extensions for filing VAT returns and paying VAT, January’s cash receipts from domestic VAT are impacted by revenue from the previous November. It is therefore worth noting that cash receipts from value added taxes were low in January 2021 due to the temporary cut in VAT rates in the second half of 2020. Receipts from import VAT were up by 1,140.0%. This surge was due mainly to the deferred deadline for paying import VAT on goods imported in December 2020. Under the Second Coronavirus Tax Assistance Act (Zweites Corona-Steuerhilfegesetz), the deadline was pushed back from 16 January 2021 to 26 February 2021. This had the effect of lowering last year’s baseline figure considerably, resulting in the high increase recorded for January 2022.
In January 2022, revenue from taxes accruing solely to the Federation was down by 7.8% compared with the same month last year. Revenue from the solidarity surcharge was down by 47.7% on the year. Because wages tax is not due until the month after the wages are earned, the abolition of the solidarity surcharge for a large majority of wages tax and income tax payers from 1 January 2021 onwards did not reduce cash receipts from the solidarity surcharge until February 2021. In other words, the January 2021 baseline figure for solidarity surcharge revenue still reflects the legal situation prior to the change.
Revenue losses were also recorded for tobacco duty (down by 9.9%) and insurance tax (down by 3.0%). Other taxes posted year-on-year revenue gains, some of them significant: energy duty revenue was up by 17.8%, electricity duty revenue was up by 7.4% and aviation tax revenue surged by 513.2%, although the latter remains significantly below pre-crisis levels. The rates of change for alcohol duty, sparkling wine duty, alcopops duty and intermediate products duty, some of which were very high, can be attributed to shifts in payment structures in 2021. Trends in revenue from other taxes had only a minor impact on overall receipts from federal taxes.
Receipts from taxes accruing solely to the Länder were up by 21.6% on the year in January 2022. Taxes recording revenue gains included real property transfer tax (up by 10.9%), inheritance tax (up by 44.4%), fire protection tax (up by 10.4%) and betting and lottery tax (up by 28.8%). The increase in receipts from betting and lottery tax was mainly due to substantial proceeds from the new online poker tax and virtual slots tax, which have been levied since 1 July 2021. Receipts from beer duty rose by 20.8%.
Borrowing trends for the Federation (budget and special funds, excluding loan financing) in January 2022
Borrowing trends for the Federation (budget and special funds, excluding loan financing) in January 2022
in €m
Total
1,347,990
44,052
-35,755
1,356,287
8,297
-3,222
broken down by purpose
Federal budget
1,306,463
44,070
-35,755
1,314,778
8,315
-3,222
Financial Market Stabilisation Fund (loans for expenses pursuant to section 9 (1) of the Stabilisation Fund Act (Stabilisierungsfondsgesetz))
22,737
-3
-
22,734
-3
-
Investment and Redemption Fund
16,111
-15
-
16,096
-15
-
Economic Stabilisation Fund (loans for recapitalisation measures pursuant to section 22 of the Stabilisation Fund Act)
2,679
-
-
2,679
-
-
broken down by debt type
Conventional federal securities
1,250,805
42,475
-35,755
1,257,524
6,720
-3,419
30-year federal bonds
277,178
2,444
-
279,622
2,444
-3,344
10-year federal bonds
586,787
8,277
-16,130
578,934
-7,853
-274
Federal notes
157,539
5,444
-
162,983
5,444
56
Federal Treasury notes
77,336
6,664
-
83,999
6,664
65
Treasury discount papers issued by the Federation
151,966
19,646
-19,625
151,986
21
78
Inflation-linked federal securities
65,390
684
-
66,074
684
196
Green federal securities
21,627
893
-
22,520
893
4
Securitised loans
5,695
-
-
5,695
-
-3
Other loans and ordinary debts
4,474
-
-
4,474
-
-
Additional information
Liabilities from the capital indexing of inflation-linked federal securities
6,722
7,099
377
-
Reserves in accordance with the Final Payment Financing Act (Schlusszahlungsfinanzierungsgesetz)
4,318
4,350
32
-
Liabilities resulting from indexing include the amount by which the original issuance price has increased due to inflation between the start date and the specified reference date.
In contrast, reserves include only the increases that are noted on coupon payment dates (15 April of every year) (section 4 (1) of the Final Payment Financing Act) and on reopening dates for inflation-linked securities (section 4 (2) of the Final Payment Financing Act).
Borrowing trends for the Federation (loan financing) in January 2022
Borrowing trends for the Federation (loan financing) in January 2022
in €m
Total
90,413
1,750
-1,006
91,156
744
27
broken down by purpose
Financial Market Stabilisation Fund (loans for resolution authorities pursuant to section 9 (5) of the Stabilisation Fund Act)
55,000
1,750
-
56,750
1,750
20
Economic Stabilisation Fund (loans for KfW pursuant to section 23 of the Stabilisation Fund Act)
35,413
-
-1,006
34,406
-1,006
6
Any discrepancies in totals are due to rounding.
Under section 9 (5) of the Stabilisation Fund Act, the Federal Ministry of Finance is empowered to borrow up to €60bn for the Financial Market Stabilisation Fund so that the Fund can grant loans to resolution authorities for the purpose of refinancing (as per section 8 (10) of the Stabilisation Fund Act) assets that they have taken over.
Such borrowing is neutral overall in terms of debt, because it replaces the funds that resolution authorities would otherwise have to borrow on the market. However, it does increase the debt level in federal securities.
Under section 24 (1) in conjunction with section 23 of the Stabilisation Fund Act, the Federal Ministry of Finance is authorised to borrow up to €100bn for the Economic Stabilisation Fund for the purpose of granting loans. Under section 23 of the Stabilisation Fund Act, the Economic Stabilisation Fund can grant loans to KfW for the purpose of refinancing the special programmes assigned to it by the federal government in response to the coronavirus crisis.