FDP against value-added tax relief for food

style="float: right; margin-bottom: 10px; font-weight: 600;"Sat 23rd Apr, 2022

In the debate about rising food prices, the co-ruling FDP rejects a VAT exemption for certain products. Faction leader Christian Dürr told the Neue Osnabrücker Zeitung (Friday): "Unfortunately, the VAT reduction is not a targeted measure to relieve people with low incomes."

He also said that the reduced tax rate in the Corona pandemic had hardly made itself felt in people's wallets. When asked on Friday, the FDP-led Federal Ministry of Finance referred only to a billion-dollar package of other relief measures that had already been announced.

Social and consumer groups had called on the government to take advantage of new EU rules and set VAT at zero percent for food products such as fruit and vegetables. Agriculture Minister Cem Özdemir (Greens) supported the demands, saying, "If we make fruit and vegetables cheaper, we not only relieve consumers comparatively inexpensively, but in addition we also promote a healthy diet through the steering effect gained." However, Özdemir also referred to the responsibility of the Ministry of Finance.

Support came from the Left Party. Faction leader Dietmar Bartsch told the "Tagesspiegel" (Friday): "The temporary suspension of VAT on basic foodstuffs is a measure that would work quickly, something like that is needed now." He added that the coalition's announced second relief package was not enough. FDP politician Dürr, on the other hand, emphasized that both packages contain measures for families and households that are having a particularly hard time. "That makes more sense in all cases than a patchwork of VAT."

The standard rate is 19 percent. The reduced rate of 7 percent subsidizes products that serve the common good - including staples such as milk, meat, fruit, vegetables and baked goods.

The Secretary General of the German Farmers' Association, Bernhard Krüsken, said: "Ideally, all food should be subject to the reduced tax rate." However, he said it is just as important to finally break the "deadlock" on a financing system for the restructuring of livestock farming. The traffic light coalition is discussing a model so that farmers do not have to sit on additional costs for higher standards. According to the recommendations of a commission of experts, an animal welfare levy on animal products is under discussion. A surcharge of 40 cents per kilogram of meat would be conceivable.

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