Booming economy gives Germany tax windfall

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Germany's 2010 tax receipts will be around 15.2 billion euros (21.6 billion dollars) higher than projected earlier this year thanks to a strong economic rebound, the government said Thursday.

Total tax receipts for the federal government, for Germany's 16 states and for local authorities are now forecast to be 525.5 billion euros, Finance Minister Wolfgang Schaueble said in Berlin.

For 2011 the forecast has been raised by 22.4 billion euros and for 2012 by 23.4 billion euros.

Europe's biggest economy has enjoyed a stronger-than-expected recovery from last year's sharp downturn, with the government forecasting output to grow 3.4 percent in 2010 after falling 4.7 percent in 2009.

The new projections are likely to increase the pressure on the government to cut taxes, including from Chancellor Angela Merkel's junior coalition partners, the pro-business Free Democrats (FDP).

Merkel and Schaeuble, both of whom are from the centre-right Christian Democrats (CDU), have resisted such calls so far, saying the priority must be to cut Germany's budget deficit.

© 2010 AFP

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