More than half of municipalities have recently raised taxes

More than half of municipalities have recently raised taxes

To get more money into the coffers, more than half of the cities and municipalities in germany have raised taxes in recent years. This is the result of a recent analysis by the consulting company ernst& young (EY), which is available to the deutsche presse-agentur.

Accordingly, 53 percent of all municipalities have raised the business tax for companies at least once since 2012. 60 percent of municipalities have since raised the B property tax on developed and developable land. The taxes were lowered in the period as good as nowhere.

The two taxes are essential sources of revenue for cities and municipalities and can be set by them through the so-called levy rates. From federal state to federal state and also within the individual states, there are therefore sometimes serious differences, also depending on the financial situation of the municipalities. In the case of property tax, for example, the bandwidth in north rhine-westphalia alone, the state with the highest average rates, ranges from 260 percent (harsewinkel) to 959 percent (bergneustadt).

According to the study, every municipality in the saarland, for example, has raised its property tax since 2012, 97 percent in hesse. In bavaria, on the other hand, property owners only had to pay more in a good quarter of the towns and municipalities. A similar picture emerges in the case of trade tax: while in hesse a good 86 percent of municipalities raised their rates, in bavaria the figure was less than 20 percent. There were also many increases in north rhine-westphalia and rhineland-palatinate, and rather few in baden-wurttemberg.

"Some highly indebted municipalities in structurally weak regions have had to make massive tax cuts in order to have any chance of balancing their budgets," says EY expert bernhard lorentz. "Prosperous regions, especially in the south of germany, have largely been able to do without tax increases in recent years."Some of them are now even worse off in the competition for locations, while others have strengthened their attractiveness as a place to live and do business.

From the municipalities’ point of view, however, the tax increases have paid off for the time being, according to the study. The surpluses have increased, the overall debt has decreased – this lowers the pressure for action. "On top of that, from the point of view of those politically responsible, the limit of what was reasonable had now been reached in many places," said lorentz. However, a deterioration in the general economic situation could quickly put the municipalities under pressure again, he warned.