German tax revenues up 2.6% in May, finance ministry says

BERLIN (Reuters) -Germany's federal and state government tax revenues rose at a slower pace in May than in recent months, growing 2.6% from the same month last year, the finance ministry said on Friday.

That compares with rises of 10.2% in April, 11.1% in March and 8.1% in February.

Total tax revenue in May came in at 62.8 billion euros ($72.05 billion), the ministry's monthly report said.

Income and sales tax were up, it said, but there was no significant year-on-year growth in withholding tax on interest and capital gains for the first time since May 2023.

From January to May 2025, tax revenue was up 8.3% year on year at 349 billion euros.

Income tax is expected to see declining growth rates in 2025 as wage increases agreed in collective bargaining deals are increasingly included in the basis for comparison, and the labour market also remains subdued.

Earlier this month, four German institutes raised their forecasts for Europe's largest economy this year and now expect it to grow after two consecutive years of contraction.

The ministry said it does not expect any strong momentum in coming months after a surprisingly strong first quarter.

"The short-term outlook continues to be clouded primarily by the uncertainty associated with international trade policy," said the report.

($1 = 0.8716 euros)

(Reporting by Christian Kraemer, Writing by Miranda Murray, Editing by Madeline Chambers)