Restaurant association hopes for reduced VAT rate
The hotel and restaurant association Dehoga in Lower Saxony sees a chance that the return to the normal VAT rate on restaurant meals could still be averted. At the Dehoga state association conference in Wilhelmshaven on Monday, Managing Director Rainer Balke called on the federal government to show its colors.
There is currently a dispute among the coalition parties as to who is actually in favor of a return to the normal VAT rate. "There is enough time to put the issue back on the agenda and finally concede these seven percent as demanded," said Balke with a view to the final meeting of the Bundestag Budget Committee scheduled for Thursday.
According to the chief budgets of the SPD, Greens and FDP, the federal government had agreed that from January onwards, food in the catering trade would again be subject to a VAT rate of 19 percent instead of 7 percent. The lower rate was initially introduced as an aid during the coronavirus crisis and then extended. Following a ruling by the Federal Constitutional Court, according to which 60 billion euros in unneeded loans for the fight against the coronavirus crisis could not be transferred to the climate fund, the federal government's financial leeway has been significantly reduced. According to previous figures, the special tax subsidy for restaurants costs around 3.4 billion euros.
The industry association reckons that if the normal tax rate of 19 percent is restored, many businesses will not be able to pass on higher costs to their guests and will therefore have to close. The association assumes that up to 1000 businesses in Lower Saxony will be threatened with closure in the coming year. Around 10,000 jobs could be lost in the hospitality industry as a result, it said.
The coronavirus years and the energy crisis had already hit the hospitality industry despite state aid. Compared to 2019, the number of businesses in Lower Saxony fell by around 3,500 to 17,000 at the end of 2022.
The hospitality industry, particularly the restaurant sector, is closely monitoring the ongoing dispute among coalition parties regarding the return of the normal VAT rate. This could significantly impact labor market dynamics within the industry, potentially leading to job losses if businesses cannot afford the increased costs. Furthermore, education institutions should consider incorporating courses on taxation and its impact on various industries to prepare future professionals for such complex economic situations.
Source: www.dpa.com
