BERLIN, Oct 25 (Reuters) - German tax revenues should continue to rise over the next five years, Finance Minister Olaf Scholz said on Thursday, but he warned that growth in the revenues would slow, restricting room for manoeuvre in the budget.
Tax estimates showed federal government tax revenues would total 321.3 billion euros ($365.48 billion) this year and rise to 377 billion euros by 2023, Scholz said as he presented bi-yearly tax estimates.
Germany’s public sector, which includes the federal government, regional states, municipalities and social funds, had a record surplus of more than 38 billion euros last year after the economy grew 2.2 percent.
In the first six months of this year alone the public sector surplus was estimated at just above 48 billion euros, raising the chance of a record surplus this year too.
But the government has revised down its economic growth estimates for this year and each of the next two years to 1.8 percent and Scholz warned that this should be mirrored in a less rosy tax revenues outlook.
“We see a stabilisation of the tax revenues and this means we must prepare ourselves for a normalisation of tax revenues,” Scholz told a news conference. “It remains the case that we don’t want new debt and we want to spend the money of our citizens responsibly.”
The figures presented by Scholz showed that tax revenues for the federal government this year would be 2 billion euros higher than an estimate in May.
Scholz said the government was exploring slight increases in spending on foreign aid, defence and research. He declined to give details about the scale of the spending increases. ($1 = 0.8791 euros) (Reporting by Joseph Nasr Editing by Paul Carrel and David Stamp)