The committee on tax projection said the German government is now expected to take in €717.8 billion in tax in 2020, €98.6 billion less than the amount estimated in November. The shortfall reflects the economic damage from the COVID-19 outbreak caused by the novel coronavirus, which has forced the government to spend massive amounts to help cushion the blow for companies and households.
The committee usually meets twice a year, but this year it will hold a special meeting in September to offer an interim tax forecast, Finance Minister Olaf Scholz said during a news conference.
The group's estimates for the coming four years also were lower than what it predicted in November. Revenue for next year is expected to be €792.5 billion, €52.7 billion lower than the amount previously forecast, while revenue in 2022 is due to be €816 billion, €59.1 billion below the November forecast.
In 2023 and 2024, the differences to the forecast are predicted to be €53.8 billion and €51.7 billion respectively, reducing the expected tax take for those years to €851.1 billion and €883.3 billion.
Scholz deflected questions about whether Germany would need to raise taxes to pay for the cost of the crisis, saying merely, "We don't exit the crisis by saving."
The focus now, he said, is on agreeing to an economic stimulus package that will come into force as the economy begins to reopen in the coming weeks. Germany's governing coalition hopes to agree on a stimulus package in June, Scholz said.
German Chancellor Angela Merkel told the country's Parliament Wednesday that there were no immediate plans to raise taxes in Germany.
Germany is one of the more fortunate countries in Europe; in balancing its budget in recent years, it can borrow money on the markets at negative yields, which means that investors effectively pay to lend money to Germany.
"Thanks to the good budget planning in previous years, the corona crisis can be financially dealt with," Scholz said in an accompanying statement.
--Editing by Vincent Sherry.
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