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No Need For German Migrant Tax, Figures Suggest

by Ulrika Lomas,, Brussels

14 January 2016

Germany's budget surplus for 2015 was larger than expected and the German Government has again indicated that it will not need to raise tax to meet higher immigration-related costs.

Provisional data for 2015, presented by the Finance Ministry on January 13, shows a structural surplus for a second consecutive year, of 0.1 percent of gross domestic product, or EUR12.1bn (USD13.5bn). Total federal revenues, at EUR311.4bn, were EUR4.5bn above target, while expenditures, excluding allocations to the reserve, were EUR2.6bn below target, at EUR299.3bn.

The surplus will enable the Government to allocate a further EUR7.2bn to finance efforts to receive and accommodate asylum seekers and refugees, in addition to the EUR5bn already earmarked.

The German Government is said to be targeting a surplus in 2016 also. Finance Minister Wolfgang Schäuble said: "We will urgently need this reserve to finance additional outgoings for accommodating and integrating refugees. As far as possible, we want to do without new debt in 2016 too."

Last October, it was rumored that Germany was mulling the introduction of a new tax, or increasing existing taxes, to help meet the costs of a surge in political asylum applications. However, the idea was rejected by Chancellor Angela Merkel, who said: "We can be pleased that we have been well managed for years and that our economic situation is currently good." She added that there is "definitely" no need for extra taxation.

The German Government also previously denied discussions on an EU crisis tax with the European Commission, which, according to a report by the Sueddeutsche Zeitung at that time, could have taken the form of a surcharge on petroleum or value-added tax rate increases. The revenues from these additional taxes would then have been distributed to those EU member states on the front line of the migrant crisis, including Greece, Italy, and Spain.

TAGS: Finance | tax | European Commission | value added tax (VAT) | fiscal policy | budget | Germany | Greece | Italy | Spain | Europe

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