The combined tax income of Germany’s federal administration, its states and municipalities surpassed the mark of €1 billion for the first time ever last year, according to the Federal Statistical Office.
Altogether, it took in €1,035 billion – a plus of 4 per cent or €40 billion compared to 2024. This means each of Germany’s 84 million inhabitants paid more than €12,300 in taxes on average.
The sum does not include social security contributions, which have also risen significantly, set to reach a record high in 2026.
Record tax revenues are not enough for the German state to balance its budget, though. Preliminary calculations by the Federal Statistical Office revealed a deficit of around €107 billion for 2025, more than 10 per cent of total tax income.
The biggest gains came from value-added tax (VAT), the revenue from which rose by 4.4 per cent, as well as from payroll taxes (up 5.1 per cent) and other income taxes (6.5 per cent higher).
The overflowing tax coffers are a stark contrast to Germany’s languishing economy.
Yesterday, the Federal Statistical Office reported that Europe’s biggest economy grew by only 0.2 per cent in 2025, mainly thanks to consumers and the state increasing their spending.
Statistician Ruth Brand said: “The growth is primarily attributable to increased consumer spending by private households and the government.
“In contrast, exports declined once again. The export industry faced strong headwinds from higher US tariffs, the appreciation of the euro, and stronger competition from China.
“In addition, investment remained weak. Investment in both equipment and construction was lower than in the previous year,” Brand said.
The high tax burden is routinely cited as a growth impediment by economists.
A survey among 1,700 family businesses published in December 2025 found that the high taxes also made it difficult for companies to find qualified employees and get them to work efficiently. More than 80 per cent of respondents said their employees were “heavily” or “very heavily” burdened by taxes.
Rainer Kirchdörfer, chairman of the Family Business Foundation which commissioned the study, said: “It is precisely the high taxes on labour that paralyze both sides and rob them of the joy of achievement. Germany, with its high tax rates, has missed the boat here too.”
Clemens Fuest, president of economics think-tank Ifo Institute, recently warned that Germany was at risk of sliding into “perpetual stagnation”.
