German tax take could fall further, govt adviser says

Germany's tax take could be as much as 20 billion euros ($22.1 billion) lower than expected over the coming two years because of the country's slowing economy, according to a member of a body that advises the government on income forecasts. In an interview with Handelsblatt newspaper, an extract from which was published on Monday, Jens Boysen-Hofgrefe said the Working Party on Tax Revenue Estimates is likely to make its second downward revision in a year when it meets this autumn.

The warning that a deteriorating economy will leave the central government, regions and municipalities with fewer resources comes shortly after Reuters reported that Berlin was looking at ways to boost counter-cyclical spending without triggering its constitutional "debt brake". "While the numbers for this year will come in very close to our forecasts, tax income in 2020 and 2021 could be around 10 billion euros lower than we thought in May," Jens Boysen-Hofgrefe told the newspaper.

Based at the Finance Ministry, the Working Party is an independent council that prepares twice-yearly estimates of future tax takes on all levels in Germany to help to inform government policy.

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