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UPDATE 1-Germany trims 2014 tax intake estimate to 639.9 bln euros
May 8, 2014 / 1:55 PM / 3 years ago

UPDATE 1-Germany trims 2014 tax intake estimate to 639.9 bln euros

(Adds quotes, details)

BERLIN, May 8 (Reuters) - The German government surprised with a slightly lower tax revenue estimate for 2014 on Thursday, which Finance Minister Wolfgang Schaeuble said left Germany no financial leeway to cut taxes as it prioritises budget consolidation.

The ministry’s panel of tax experts put this year’s tax take at 639.9 billion euros, down 400 million euros from the last estimate in November, but some 20 billion euros higher than 2013’s take. The panel expects tax revenue for the years 2014 to 2018 to total 3.448 trillion euros.

“The tax estimates do not create any new room for manoeuvre financially. From 2015 onwards we want to manage without any new debt,” Schaeuble told a news conference.

Record tax revenues have triggered calls from some within Chancellor Angela Merkel’s conservatives to overhaul the mechanism of so-called “cold progression”, under which income tax brackets are not adjusted for inflation. The finance ministry ends up taking in billions of euros in extra revenues as a result.

Their Social Democrat coalition partners don’t object to an overhaul itself, but have argued that tax on higher earners should be raised to compensate for lost revenues. That, however, would break an election pledge made by Merkel’s conservatives not to hike taxes.

Strong economic growth and a booming labour market have boosted German tax revenues and projected future tax take. (Reporting by Alexandra Hudson and Annika Breidthardt; Editing by Madeline Chambers)

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