Dehoga: Increasing value added tax costs livelihoods
The Thuringian pub landscape could be thinned out even further. The managing director of the German Hotel and Restaurant Association in Thuringia, Dirk Ellinger, said on Friday that the VAT would rise again from 7% to 19% from January, as decided by the coalition government. He assumes that around five percent of businesses will have to close. At the moment, there are just under 4,000 catering businesses in the state. "This will unfortunately lead to a further decline in pubs. Especially in rural areas."
Takeaway, supermarket or delivery food is taxed at seven percent. In order to relieve the catering industry during the coronavirus crisis, the tax rate for food in restaurants and cafés was also temporarily reduced from 19% to 7%. The regulation was extended several times due to the energy crisis, most recently until the end of this year.
The rise in Value Added Tax from 7% to 19% in the hospitality industry, as proposed by the coalition government, could lead to substantial closures of catering businesses, possibly affecting around 5% of them. Given the current economic climate, subsidies or favorable tax policies might be essential for the survival of the hospitality sector, which significantly contributes to the regional economy.
Source: www.dpa.com
