–Adds Comments From Press Conference To Story Sent At 13:15 GMT

BERLIN (MNI) – German total public sector tax revenue this year
will amount to E571.2 billion, some E16.2 billion higher than previously
estimated, according to figures from the government’s tax estimate
commission released Friday by the Finance Ministry.

Tax revenue for the federal government alone is projected at E246.7
billion in 2011, some E9.3 billion above previous estimates. In its 2011
budget law, the government assumed federal tax revenue for this year of
E229.2 billion.

Federal net new borrowing this year will likely be significantly
below E25 billion, thus markedly undershooting the E48.4 billion
earmarked in the 2011 budget, the ministry said.

This means that federal net new borrowing in 2012 will likely be
higher than this year, Deputy Finance Minister Steffen Kampeter pointed
out at a press conference. In its budget draft for next year the
government currently foresees borrowing of E27.2 billion.

The tax commission forecast total public tax revenue of E592.0
billion in 2012 (up E7.4 billion), E613.2 billion in 2013 (up E4.5
billion), E635.8 billion in 2014 (up E5.2 billion) and E658.5 billion in
2015 (up E6.2 billion).

Federal tax revenue is projected at E249.9 billion in 2012 (up E2.7
billion), E257.2 billion in 2013 (up E1.8 billion), E268.3 billion in
2014 (up E3.4 billion) and E276.7 billion in 2015 (up E2.4 billion).

For 2016, the tax commission’s first forecast is for total public
tax revenue to rise by 3.3% to E680.0 billion and for federal tax
revenue to increase by 3.8% to E287.2 billion.

The tax commission’s new estimates assume nominal GDP growth of
3.5% in 2011, 3.8% in 2012 and 2.9% per year until 2016.

Despite the positive revenue developments, the government will
continue on its budget consolidation course, Kampeter vowed, arguing
that Germany must be a role model for the rest of Europe. “There exists
no leeway for massive extra spending,” he said.

However, the ministry will stick to its plan to cut income tax
rates by some E6-7 billion from 2013, Kampeter said.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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