Germany's federal, state and local governments can expect €21.9 billion ($23.8 billion) less tax revenue next year than assumed in the autumn.
The tax estimators project that the state will collect a total of €995.2 billion in 2025, according to the Finance Ministry in Berlin on Thursday.
Finance Minister Christian Lindner said: "What I repeat almost like a mantra in view of the exorbitant political wishes is now available in black and white: There is no new financial room for manoeuvre in the foreseeable future."
In the remaining years of the estimate period up to 2028, there will also be a significant shortfall in revenue compared to the last estimate - totalling €80.7 billion.
According to the ministry, tax revenue will be around €16 billion lower on average each year compared to the October 2023 forecast.
Lindner called the current tax estimate a "reality check" for the 2025 federal budget: "We have to say goodbye to unrealistic wishes and press ahead with the consolidation of the budget. This requires discipline and willpower."
The results also show that the financial challenges will become greater in the coming years, he said.
"If we don't take countermeasures now, the trend will worsen, especially for the federal government. We can't just pile on the structural challenges with more and more debt. What we need is obvious: more growth, we need an economic turnaround," said Lindner.
"Only with strong economic development can we create prosperity and stable public finances," the minister added.
