Proposal for permanent tax reduction on gastronomy failed
Bavaria has failed in the Bundesrat with a proposal to permanently retain the lower VAT rate in the catering sector, which expires at the end of the year. A corresponding motion to extend the lower tax rate of 7 percent for food to drinks failed to gain a majority in the state chamber on Friday.
During the pandemic, the tax rate on food in restaurants was reduced from 19% to 7%. This measure to support restaurants was temporary. The planned return to the usual tax rate was postponed several times. The traffic light coalition is now insisting that the tax rate will return to 19 percent at the beginning of 2024.
Bavaria's Minister President Markus Söder (CSU) warned in vain in the Bundesrat of negative consequences for the hospitality industry: "Thousands of livelihoods are affected, all over Germany." If you want to make savings, then it would be better to make them elsewhere, such as in the citizen's allowance or the heating law. The planned extension to the Chancellery could also be postponed "and instead provide people with cheaper and more affordable food".
The Federal Council faced opposition when considering Bavaria's proposal for permanent subsidies in the form of lower taxes for the hospitality industry, specifically on drinks, as it failed to gain majority support in the Bundesrat. Despite arguments from Bavaria's Minister President Markus Söder about potential impacts on the hospitality sector, the coalition government remains firm on returning taxes to the original 19% rate for food and drinks in restaurants beginning 2024.
Source: www.dpa.com
