Germany collects all-time record in tax revenue

BERLIN -- Germany collected more in taxes for December 2011 than ever before in a single month, according to the country's Frankfurter Allgemeine Zeitung (FAZ). The record sum of nearly 71 billion euros (US$93.9 billion) is up 4.1 percent over December 2010, the current monthly report from the Federal Ministry of Finance said.

The news comes on the heels of positive economic growth in Germany for the whole of 2011, as well as the lowest unemployment rates the country has seen in 20 years - an anomaly of a story against the backdrop of the eurozone currency crisis.

Finance Secretary Thomas Steffen confirmed that federal and state tax income had developed well over the past year - although growth had slowed significantly. The first three months in 2011 saw tax income grow by 10.8 percent over the previous year, whereby the fourth quarter only saw a 6.1 percent increase, the FAZ reported.

Experts warn that growth is slowing as rates from the previous year would suggest. December's rate of revenue increase during the same period in 2010 was down from 7.6 percent in November, a rate that had dropped from 8.5 percent in October.

The online daily The Local reports that the federal "government's prognoses for 2012 predict a slow start to the year as Germany struggles to manage the eurozone's currency crisis, followed by a recovery in the second half of the year."

"The latest figures may hide some cause for concern, since December is traditionally the strongest tax month of the year, as it contains extra spending and income over Christmas," the daily added.

Nonetheless the federal budget seemed to reflect the positive numbers, according to the country's Handelsblatt financial newspaper, citing a mere 17.3 billion euros (US$22.9 billion) in new debt - 9 billion euros (US$11.9 billion) less than the budget anticipated - with interest payments for the year amounting to just 32.8 billion euros (US$ 43.4 billion).

The economy seems to be recovering, with tax revenue figures looking good," Kiel Institute for the World Economy Alfred Boss told Handelsblatt.

Photo:Flickr/Images_of_Money

This post was originally published on Smartplanet.com