Germany is bracing for a significant shortfall in tax revenues over the coming years, with a projected decrease of €58.1 billion by 2028. The latest forecast from the Working Group on Tax Estimates reveals that the country will collect €12.7 billion less in taxes next year than previously anticipated.

This downturn is attributed to a sluggish economy, with Finance Minister Christian Lindner emphasizing the need for fiscal consolidation and warning against new spending initiatives.

The federal government, along with states and municipalities, must navigate these financial constraints, as the anticipated tax revenues will primarily offset inflation rather than provide additional fiscal space.

The economic challenges are compounded by geopolitical uncertainties and internal coalition disagreements, further complicating budgetary planning.