Tax Revenue: Swifter Recovery during the Coronavirus Pandemic than during the Global Financial Crisis

Kristina van Deuverden ()

DIW Weekly Report, 2022, vol. 12, issue 11, 77-84

Abstract: Although economic growth continued to be lukewarm in 2021, tax revenue increased significantly, even exceeding the pre-crisis level despite economic policy measures associated with revenue losses. During the 2008-2011 global financial crisis, tax revenue followed a different path: Its recovery lagged behind economic recovery, first reaching the pre-crisis level in 2011. In 2021, value-added tax (VAT) increased as expected following the temporary reduction of the VAT rates in 2020, as did the pay-as-you-earn tax due to the reduction of short-time work. In contrast, taxes on profits have experienced unexpectedly high growth. Clearly, economic policy has stabilized incomes more successfully via rapid and comprehensive measures during the coronavirus pandemic than it did during the global financial crisis. However, price developments are likely to be driving the strong increase in—nominal— profit income. This is one reason that the plans to provide households with relief to help them cope with skyrocketing energy prices and to increase the personal allowance are the right decisions.

Keywords: tax revenue; macroeconomic development; corona economic crisis; global financial crisis (search for similar items in EconPapers)
JEL-codes: E62 H20 H30 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.837360.de/dwr-22-11-1.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:diw:diwdwr:dwr12-11-1

Access Statistics for this article

DIW Weekly Report is currently edited by Tomaso Duso, Marcel Fratzscher, Peter Haan, Claudia Kemfert, Alexander Kritikos, Alexander Kriwoluzky, Stefan Liebig, Lukas Menkhoff, Karsten Neuhoff, Carsten Schröder, Katharina Wrohlich and Sabine Fiedler

More articles in DIW Weekly Report from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().