Higher tax revenue: Lange sees no leeway

Created: 05/17/2022Updated: 05/17/2022 17:18

Katrin Lange (SPD), Brandenburg Minister of Finance and Europe.

© Soeren Stache/dpa-Zentralbild/dpa/Archive image

Brandenburg can count on more tax revenue.

Minister Lange, however, curbs the euphoria and wants to use it to repay loans that have been taken out.

The left in the state parliament calls for a supplementary budget.

Potsdam - According to the May tax estimate, the expected tax revenue in Brandenburg for the current and the coming years is higher than previously assumed.

"The prognosis is quite pleasing, even if the price level, which has also risen, is playing its part," said Finance Minister Katrin Lange (SPD) on Tuesday in Potsdam.

At the same time, she rejected the offer for additional spending.

As long as the country relies on new borrowing and withdrawals from reserves, there is no scope for spending.

Higher tax revenues would tend to help ensure budget balance, Lange said.

According to the State Chancellery, the state's income in 2022 is expected to increase by 5.4 percent compared to 2021 to around 542.7 million euros.

In 2023 and 2024, a further increase compared to the previous years of around 475 million euros and around 445 million euros respectively is expected.

Municipalities will also benefit from higher state tax revenues.

According to the ministry, 22.4 percent each go to the cities and municipalities.

In 2023 and 2024 alone, there will now be around 440 million euros in additional income for Brandenburg's municipalities compared to the estimate from November 2021.

For the current year, the federal government expects gross domestic product (GDP) to increase by 2.2 percent in real terms.

In the coming year, the development is expected to continue with a real plus of 2.5 percent.

The high rate of inflation is being exacerbated by the war in Ukraine.

This leads to higher revenue, for example from sales tax.

Brandenburg's Minister of Finance sees many uncertainties with regard to the results of the current tax estimate for the coming years.

She cited the progress of the corona pandemic, the war in Ukraine and its economic consequences as well as significantly rising energy prices as examples.

"In this respect, we are first concentrating on the year 2022 and have to put some question marks behind the figures for the following years," said Lange.

The left in the Brandenburg state parliament are now demanding a supplementary budget of 500 million euros.

The money must be put into the municipal infrastructure, especially in schools and daycare centers.

It's about "expenditure constraints" and not about "spending leeway," said parliamentary group leader Sebastian Walter.

In addition, with the Ukraine war and rising energy prices, the challenge is huge and affects everyone.

The state earns through the value added tax and sales tax with higher prices, Walter justified the demand of the left parliamentary group.

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The SPD and CDU in the state parliament, however, reject a supplementary budget.

The budget situation is very serious, said CDU financial politician Steven Breetz.

“There is no place for sham games.” Economic loans that the country took out in 2020 would have to be repaid from the additional income.

A volume of around 400 million euros is still open.

The SPD faction said it was assumed that no supplementary budget would be necessary.

For the Greens, the correctness of the austerity policy has been confirmed in the crisis.

Fiscal policy spokesman Thomas von Gizycki explained that lower spending to deal with the pandemic made it possible to repay 500 million euros in debt from 2020.

The existing spending leeway within the framework of the debt brake would have to be fully exploited for the further modernization of the country.

The BVB/free voters faction spoke out against a supplementary budget, although there is certainly a need for financing in some areas.

If you use the country's special assets for measures to cushion the Ukraine crisis, you circumvent the debt brake, said Free Voter MP Philip Zeschmann.

dpa