Tax estimate adds 4.1 billion euros for federal 2027, but Klingbeil sees no new room

Revenue forecast

The Arbeitskreis Steuerschätzung, a working group of federal government experts, leading economic research institutes, the Federal Statistical Office, the Bundesbank, the Council of Economic Experts, and representatives of the states and municipalities, published its autumn forecast on 22 October 2026. For the federal budget, the estimate puts tax income in 2027 at 398.6 billion euros, which is 4.1 billion more than the May projection assumed. Across the whole public sector, including states and municipalities, the forecast sees 10.9 billion euros more for next year and total revenue of slightly over one trillion euros. Through 2030, the public-sector outlook rises by 43.4 billion euros compared with May (Spiegel Online gave the figure as 43.3 billion). The committee meets twice a year, in spring and in autumn.

Why the numbers improved

The federal government has raised its growth outlook for this year from 0.5% to 1.3%. For next year it now expects growth of 1.1%, up from 0.9%. Reports credit strong exports and state packages for infrastructure and defence investment, even though global crises such as the Iran war continue to weigh on the economy. Leading economic institutes expect growth to slow to a small increase again in 2028. The finance ministry said the cyclical component of the debt brake permits less borrowing when the economy is stronger, so most of the extra revenue is likely to be absorbed.

Klingbeil: no new room in the budget

Finance Minister Lars Klingbeil (SPD) said the higher income does not create new room for manoeuvre in the budget.

For 2027 we are not gaining any new room for manoeuvre overall, but we also do not have to close any new gaps.

Klingbeil added that the federal budget still needs consolidation to stay able to act in the future. He had already closed a 34 billion euro gap in his draft before it reached the Bundestag, partly through planned new taxes on plastic, tobacco and sugar. Those taxes are not all in place yet. The Union faction has serious reservations about the plastic tax, and it wants changes to the sugar tax, which has passed cabinet.

Coalition disputes over relief

Chancellor Friedrich Merz has announced a cut in the electricity tax to the European minimum, extending it to private households and small businesses at an annual cost of about 5.4 billion euros. The finance ministry said the financing has not yet been agreed with Klingbeil. The Union is demanding compensation for cold progression, which would cost about 4 billion euros in 2027. Several states are also pressing for a quick electricity tax cut, including Mecklenburg-Vorpommern, where Minister President Manuela Schwesig (SPD) is pushing for it. Klingbeil has said he is ready for stronger relief, but he wants the Union to propose ways to finance it.

Budget timetable

Talks between the Union and SPD factions are far from smooth. The budget committee of the Bundestag holds its final adjustment session on the draft in mid-November. Parliament is due to adopt the 2027 budget at the end of November.