Söder: Higher VAT in gastronomy wrong and fatal
In the opinion of CSU leader Markus Söder, the increase in VAT on food in restaurants from January 1 is a completely wrong and fatal signal. "It will lead to higher food prices, is hostile to small and medium-sized businesses and will only fuel inflation. Our economy and population must be relieved in these times of crisis - not burdened," the Bavarian Minister President told the German Press Agency in Munich on Friday.
With his criticism, Söder was reacting to reports that the governing coalition in the federal government wants to raise the VAT on food, which is currently still reduced to 7 percent, again at the beginning of the year. According to information from dpa, this was agreed by the traffic light coalition on Thursday evening.
"Instead of increasing the price of food, we need to reduce the tax on basic foodstuffs to zero percent," emphasized Söder. If the FDP, of all parties, were to agree to this tax increase, "it would be an unprecedented breach of promise that would lead to job losses and destroy professional livelihoods. Small and medium-sized businesses and the hospitality industry need our support, not discrimination."
The industry had campaigned vehemently until the end not to allow the tax cut to expire. "Politicians have once again thrown all warnings from industry associations to the wind. Instead, they are taking a special path compared to other European countries at the expense of companies and citizens in order to increase tax revenue," said Achim von Michel from the Bavarian association Der Mittelstand.BVMW. As a result of the increase in VAT, around 2,400 businesses in Bavaria alone are facing closure. "The latest decision is once again destroying tens of thousands of jobs in Bavaria and throughout Germany."
Takeaway, supermarket or delivery food is taxed at seven percent. In order to relieve the gastronomy sector 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.
In the context of Söder's criticism towards the potential VAT increase on food, it's worth noting that the hospitality industry, including restaurants and cafes, strongly opposes such a move. Higher taxes on food in this sector could lead to substantial job losses and put many small and medium-sized businesses at risk.
Source: www.dpa.com
