Germany’s Finance Minister Olaf Scholz has warned that his country’s “fat years” of higher-than-expected revenue from tax receipts are over. He warned that Germany is slated to lose momentum in the next few years.
“The good times in which the state kept taking in more taxes than expected are coming to an end,” Scholz told the Bild am Sonntag newspaper. That, he said, restricted the government’s capacity for passing new tax cuts or increasing public investment.
As reported by Deutsche Welle (DW), Germany’s international broadcaster, Germany was however expected to post another budget surplus in 2018, Scholz said, after it posted a €36.6bn surplus in 2017.
The German government has spent less than it has received in tax revenues in every fiscal year since 2014 as a result of strong economic growth, high wages and record-low unemployment.
According to DW, Scholz, a Social Democrat (SPD), cited the predicted fall in tax revenue as a reason for why he opposed abolishing the “Solidarity Surcharge,” a controversial tax designed to help finance development projects in eastern states that were part of communist East Germany.
The SPD’s coalition partners, the conservative Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), have called for ending the surcharge by 2021.