Saarland in the financial trap: Tax estimates show alarming trends!

Saarland in the financial trap: Tax estimates show alarming trends!

On Tuesday, October 29, 2024, Finance Minister Jakob von Weizsäcker announced the alarming results of the regionalized tax estimate for Saarland in a unique state press conference. The violent effects of growth weakness in Germany are unmistakable: the Saarland is also affected! Despite the positive results of the census with additional revenue of around 200 million euros a year, the overall revenue -related lesson spoil the overall picture significantly. "Euphoria is out of place," warns von Weizsäcker!

The background of this dark forecast: The autumn projection of the federal government is 0.2 % of a decline in gross domestic product (GDP) for 2024. As early as the previous year, it had dropped by 0.3 %, which forces the Saarland into a second recession and presses the intake expectations. By Weizsäcker explains that these difficult economic conditions make it impossible to look optimistically into the future. The municipal households remain under pressure. Nevertheless, one hopes for an economic recovery with GDP increases of 1.1 % and 1.6 % for the years 2025 and 2026.

tax types and financial effects

The tax manufacturing disorders are fatal: corporation tax and the assessed income tax are severely affected by the economic framework. Nevertheless, there are bright spots among state taxes: pleasant growth in the real estate transfer tax and inheritance tax by 7 and 30 million euros. In addition, from 2026, the Saarland municipalities benefit from additional additional revenue through the municipal financial equalization of around 20 million euros per year and increasing tax revenue between 30 and 50 million euros annually.

But the situation remains tense! Despite the positive effects of the demographic factors, which help to mitigate the financial difficulties, Weizsäcker makes it clear: "The financial bottlenecks will continue to take a clear focus on centrally important projects for the country in the future." Despite the radiant prospects, the financial policy struggle for the Saarland is far from over!