Association fears bankruptcies: Traffic light increases VAT in the catering industry again

Association fears bankruptcies
Traffic light increases VAT in the catering industry again

Listen to article

This audio version was artificially generated. More info | Send feedback

Hotels, bars and restaurants have suffered particularly during the corona pandemic. Reducing the VAT rate to seven percent helps, at least a little. But the federal government is missing billions in tax revenue. According to a report, 19 percent will be due again from 2024. The traffic lights do not agree.

The VAT on food in restaurants will be raised again to 19 percent at the beginning of the year. According to information from the German Press Agency, the traffic light coalition agreed on this. The “Handelsblatt” had previously reported. Food taken away, in the supermarket or delivered is taxed at seven percent.

In order to relieve the burden on the catering industry during the Corona crisis, the tax replacement for food in restaurants and cafés was temporarily reduced from 19 to seven percent. The regulation has been extended several times due to the energy crisis, most recently until the end of this year. However, with a further extension, the Ministry of Economic Affairs assumed that the tax amount would be 3.4 billion euros missing.

Business associations, especially from the food production and catering sectors, had called on politicians not to increase VAT again. The German Hotel and Restaurant Association (DEHOGA) warned of around 12,000 business closures, price increases of more than 18 percent, falling sales and numerous jobs that will be lost, and 19 percent VAT should be due again from 2024.

Within the traffic light coalition, the FDP also campaigned for an extension of the VAT reduction. According to “Handelsblatt”, parts of the SPD were also in favor. But the Liberals were unable to prevail in the traffic light coalition. It was said in negotiating circles that the SPD and the Greens had pushed for VAT to be raised again. Even a proposal from the FDP for counter-financing in the budget did not change the attitude. In the end, the decision was made by the party leaders. It will be incorporated into the deliberations on the 2024 budget.

source site-32