City expects losses in trade tax
City Treasurer informs the Administration and Finance Committee
City Treasurer Sven Schulze informed the City Council's Administration and Finance Committee yesterday evening that the shortfall in trade tax revenue for 2015 is expected to be in the single-digit millions. It is already becoming apparent that the planned income of 109.2 million euros will not be achieved in full.
The causes are manifold and range from crises in individual sectors to economic fluctuations due to the overall economic conditions of Chemnitz companies. One-off effects such as additional payments as a result of tax office audits and the impact of strategic investment decisions by individual companies cannot be calculated.
In particular, the current crisis in the automotive industry is already prompting the administration to revise the forecast from the 2015 budget downwards. This may also have an impact in subsequent years.
In order to ensure the financial capacity to act in subsequent financial years, the administration has carried out an extrapolation of the main budget items. The adoption of a budget freeze was also considered. However, due to the advanced stage of the financial year and the result of the extrapolation, it is estimated that this will not achieve the necessary success.
The administration estimates that no budget freeze will be necessary, taking into account possible additional income and reduced expenditure as well as the current status of the 2015 budget. The City of Chemnitz is also benefiting from the positive annual financial statements of recent years. Furthermore, the administration continues to focus on economical and efficient budget management.
The development of the budget and liquidity situation is monitored on an ongoing basis so that new developments can be responded to immediately and, if necessary, countermeasures can be taken.