Tax estimate: Less revenue than expected for Saxony

The Free State of Saxony will have to make do with significantly less tax revenue than originally expected. According to the May tax estimate, the Saxon state budget can expect tax revenues of 19.1 billion euros this year, the Ministry of Finance announced in Dresden on Friday. This means that the expected revenue of 258 million euros is far below the 2024 budget plan.

For the period of the upcoming double budget, the Free State can expect tax revenue of 19.6 billion euros next year and 20.4 billion euros in 2026. Compared to the estimate in October 2023 and the medium-term financial planning, this means a significant reduction of 715 million euros in the previous revenue expectations for both years.

The economic outlook is currently not good, said Saxony's Finance Minister Hartmut Vorjohann (CDU). "The consequences of the war in Ukraine and the economic policy course of the coalition in the federal government are having a considerable negative impact on the mood in the German economy." This will also result in noticeably lower tax revenues for the Free State of Bavaria. "We will have to tighten our belts considerably in the state budget."

Vorjohann was referring to the results of the tax estimate for the federal, state and local governments. According to these, revenue expectations for the years 2024 to 2028 will have to be revised downwards significantly.

It will be necessary to take a detailed and critical look at which measures and structures can still be continued in their current form. "The time for additional projects and ever new plans is over," Vorjohann continued. Even the continuation of the current level of expenditure is no longer financially viable. Anyone who wants to set new priorities on the expenditure side must also submit corresponding savings proposals.

In contrast to the Free State of Saxony, the Saxon municipalities can expect higher tax revenues in the May tax estimate compared to the October 2023 estimate. The main reason for this is the strong development of trade tax in many cities and municipalities in Saxony. Municipal tax revenue of 4.77 billion euros is expected for 2024 - and 4.96 billion euros for the coming year. Revenues of 5.15 billion euros are expected in 2026.