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4.1.4. Working Party on Tax Revenue Forecasting
Established following a critical public debate on the government’s tax revenue
estimates between the Federal Government and the Ifo Institute (a leading economic
research institute), the Working Party on Tax Revenue Forecasting is tasked with preparing
independent high-quality tax revenue forecasts. Since 1955 the federal government has
incorporated the tax revenue forecast of the Working Group into its budget plans, and,
since 1968, into its medium-term financial planning. The Working Party’s forecasts are also
part of the financial projections submitted to the Stability Council.
The Working Party meets in the spring and the fall and is comprised of representatives
from the Federal Ministry of Finance (which serves as the central co-ordinator), the Federal
Ministry of Economic Affairs, the finance ministries of the 
Länder
, the Federal Union of
Central Associations of Local Authorities
13
, the Deutsche Bundesbank, the Federal
Statistical Office, the German Council of Economic Experts and leading economic research
institutes.
14
 Its members are appointed by their respective institutions and the Working
Party is chaired by the relevant Head of Division in the Federal Ministry of Finance.
The Working Party also maintains a “sub-committee on regionalisation” that is
responsible for dividing the tax revenues estimated by the Working Party among the
individual 
Länder
. The subcommittee is made up of the representatives of the MOF and the
Länder
and is chaired by the Finance Ministry of Baden-Württemberg. The subcommittee’s
work is not made public.
The Working Party bases its projections on the economic forecast of the federal
government. As a rule, it estimates tax revenue on the basis of current tax law, although
the fiscal impact of planned changes in tax law must also be taken into account in
budgetary and financial planning. When preparing its projections, the Working Party has
privileged access to certain inside information.
The five research institutes, the Bundesbank, the German Council of Economic Experts
and the Federal Ministry of Finance prepare their own projections for each individual tax
independently. These estimates are then discussed within the working party with a view to
reaching a consensus. The estimates of the individual taxes are then extrapolated to tax
revenues for the federal government, the 
Länder
governments, the local authorities and the
revenues transferred from Germany to the EU budget. 
The Working Party provides high-quality tax revenue forecasts that form the basis of
the annual federal budget and medium-term financial planning. Given its immediate
relevance to budget planning, it attracts high media attention and is influential in the
public debate.