Association fears around 2000 restaurant closures in NRW
The industry association Dehoga fears that the renewed increase in VAT on food in the catering sector will lead to around 2,000 business closures and other serious consequences in North Rhine-Westphalia. On Friday, Patrick Rothkopf, President of Dehoga NRW, listed the consequences from his point of view: significantly higher prices, fewer guests, lower turnover, loss of sales for suppliers, price pressure in daycare and school catering, job losses and a shift in sales to takeaway, delivery services and supermarkets.
In addition, this decision will also have an impact on gastronomy as a social meeting place, especially in rural areas. After 6,000 gastronomic businesses that reportedly had to close between 2020 and 2021 due to the coronavirus, Dehoga NRW expects around 2,200 more businesses to close between Aachen and Porta Westfalica based on its survey on possible VAT effects from August. Rothkopf criticizes tax differences if, from 1 January, only food in restaurants is taxed at 19 percent again, while food delivery, "food to go" and ready meals from the supermarket continue to be taxed at seven percent.
When the survey results were presented in August, Dehoga NRW had already stated that a renewed increase in VAT would lead to a significant rise in prices in the catering industry: 95% of businesses would be forced to increase their prices, it said. At the time, Dehoga NRW assumed an average increase of 15.5 percent, as in addition to the 12-point increase in VAT, costs such as food and salaries would remain high. In the association's survey at the time, eight out of ten restaurateurs feared that fewer guests would come and eat less as a result.
VAT on food in restaurants had been reduced from 19% to 7% during the coronavirus pandemic - originally for a limited period until the end of 2022. In view of an impending energy crisis, the regulation was extended in October 2022 until the end of 2023. Beverages were again exempted from this. However, after the industry had pushed for a further extension of the regulation in recent months, the coalition government has agreed that VAT on food in the catering industry will rise again to 19% at the beginning of 2024.
The renewed increase in VAT on food in the catering sector threatens to disrupt the hospitality industry in North Rhine-Westphalia, potentially leading to the closure of around 2,200 additional restaurants. Dehoga NRW, the industry association, highlights that this decision creates an unfair tax differential between food served in restaurants and food delivered or purchased from supermarkets.
Source: www.dpa.com
