FX.co ★ German Tax Revenue Growth Eases Sharply in May

In May 2025, tax revenues collected by Germany's federal and state governments saw a 2.6% increase from the previous year, as reported by the finance ministry on Friday. This marks a significant deceleration from the 10.2% increase observed in April. For further context, March and February's tax revenue growth rates were 11.1% and 8.1%, respectively. The total tax revenue for May amounted to EUR 62.8 billion (equivalent to USD 72.05 billion), as detailed in the ministry’s monthly report. While there were increases in income and sales taxes, the withholding tax on interest and capital gains did not show notable annual growth for the first time since May 2023. Over the first five months of 2025, a year-on-year tax revenue increase of 8.3% brought the total to EUR 349 billion. Looking ahead, the growth rate of income tax is anticipated to slow in 2025, due to wage increments from collective bargaining agreements becoming a larger factor in baseline comparisons, coupled with ongoing labor market challenges.