Berlin (German news agency) – In the traffic light coalition, demands are being made to permanently continue the reduced VAT rate for food in the catering trade. “Even if the catering industry is back at around 90 percent of its sales before Corona, I am in favor of maintaining the reduced tax rate,” said the head of the SPD-Left, Sebastian Roloff, the “Handelsblatt” (Thursday edition).
The reduced sales tax revenue of a good 3.3 billion euros annually from 2024 would then have to be generated elsewhere. The VAT on food in the catering trade was reduced from 19 to seven percent during the pandemic. The regulation is scheduled to expire at the end of 2023. Roloff fears that price developments could then accelerate further.
The price increases that are significant in many places with consequences for consumers and guests “we would only heat up,” he warned. “So a return to the higher tax rate would be inflationary to some extent.” The President of the Munich Ifo Institute, Clemens Fuest, on the other hand, does not believe in permanently extending the existing reduced VAT rate for restaurant and catering services. “The tax cut was a measure that was taken during the pandemic to support the catering industry that was hit by the crisis,” he told the “Handelsblatt” (Thursday edition).
“The pandemic is long gone, so the relief effort should end.” The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, added: “In the current situation, there is no good reason why the catering industry should benefit permanently from a VAT reduction, while other sectors such as hotels or retail shops do not.” The economic and energy crisis makes it necessary to end this “preferential treatment of gastronomy” because the state has to make savings.