Study: Many municipalities continue to turn the tax screw
TIME ONLINE | News, backgrounds and debates
Stuttgart (dpa) - In order to get more money in their coffers, also in the past year numerous cities and municipalities in Germany have increased the basic and business taxes.
However, it is not as many as in previous years, and depending on the region, the trend is also very different, as emerges from a recent analysis of the consulting firm Ernst & Young (EY).
While more than every second municipality in the Saarland increased the property tax last year, not even every 20 was in Bavaria. And in terms of trade tax almost 40 percent of the municipalities in the Saarland were more successful, compared to just over 3 percent in Bavaria.
According to the study conducted in 2018, land tax in Germany went up in just under eleven percent of the cities and municipalities, and business tax in good eight percent. Both were reduced in only 0.5 percent of all municipalities.
Basic and trade tax are very important sources of revenue for cities and municipalities and can be set by themselves through the so-called levy rates. The business tax must pay companies - how high it is, is also an important location factor. Land tax - in this case property tax B - is levied on developed and buildable land and is paid by owners or allocated to tenants. How it will be calculated in future, however, has to be re-regulated according to a ruling of the Federal Constitutional Court.
The bandwidths are still huge and range for example in the property tax of a levy rate of 0 in various communities up to 1050 in Hesse Lautertal in the Odenwald. According to the study, the highest tax level is still North Rhine-Westphalia. Schleswig-Holstein has the lowest average property taxes on average, while companies on average pay the least in Brandenburg.
The proportion of municipalities raising their rates of levy has been steadily declining for several years, with both tax types. "The good economy has led in recent years to a financial relief of the municipalities and falling debts," summed up EY expert Bernhard Lorentz. "This reduced the pressure to act in some municipalities, tax increases were rarely needed."
Relatively many property tax increases were in 2018 except in the Saarland in Mecklenburg-Western Pomerania (30 percent) and Lower Saxony (19), rather few, however, except in Bavaria in Thuringia (5) and Baden-Württemberg (8). In terms of trade tax, Mecklenburg-Western Pomerania (23 percent) and Lower Saxony (18) were also at the top of the list, while Bavaria (3) and again Baden-Württemberg (5) joined the other end of the scale.
For the municipalities, who knew how to help each other, the increase in taxes was a double-edged sword, said Lorentz. "Many highly indebted communities in structurally weak regions in recent years, nothing left to do otherwise, as part massive on the tax screw to turn, in order to even have the chance of a balanced budget," he said. "However, it also reduced the attractiveness of the community for citizens and businesses."