Prevent price shock for guests
Gastronomy wants to maintain reduced VAT
November 13, 2023, 8:06 p.m
Since July 2020, the VAT on food in restaurants has currently been seven percent instead of 19 percent due to the Corona crisis and the consequences of the Ukraine war. To ensure that eating out doesn’t become a luxury, the catering industry is insisting on extending the rule.
The catering industry continues to push for the retention of the reduced VAT on food in restaurants. Otherwise, “fewer guests, less sales, further operational tasks, loss of sales among suppliers and partners and job losses” are inevitable, said the general manager of the Dehoga industry association, Ingrid Hartges, to the “Rheinische Post”. There is also a risk of a shift in sales towards take-away food, delivery services and supermarkets.
The extension of the reduced VAT is also a central demand of the food-pleasure-restaurants union, which it reiterated at its union conference. However, Chancellor Olaf Scholz did not address this in his speech at the event in Bremen. Scholz reiterated his support for another of the union’s core demands: a larger increase in the minimum wage. “In my view, what happened with the upcoming increase is not okay,” said the Chancellor.
Contrary to the opinion of the union representatives on the committee, the responsible commission decided to increase the current amount from 12.00 euros to 12.41 euros next year and then to 12.82 euros in 2025. “We can’t let this go,” said Scholz. The chairwoman of the German Federation of Trade Unions, Yasmin Fahimi, warned at the NGG trade union conference that the AfD was exploiting the issue of minimum tax in the catering industry for its own benefit. However, the right-wing party remains a party of “neoliberalism” and cannot be an ally of the trade unions.
The VAT on food in restaurants has been temporarily at seven instead of 19 percent since July 2020 due to the Corona crisis and the consequences of the Ukraine war. As things stand, this regulation expires at the end of the year. There have been calls for weeks that the reduced rate should be maintained in order to prevent dining out from becoming a luxury and further companies having to give up.
“Tax fairness looks different”
“It cannot be the case that from January 1st only food in our restaurants will be taxed again at 19 percent, but that seven percent will continue to apply to food delivery, food to go and ready meals from the supermarket,” said Hartges. “Tax fairness looks different.” There is also currently a reduced rate in 23 other EU states.
The government and especially Federal Finance Minister Christian Lindner had always emphasized that they wanted to make the possible retention of the low VAT rate dependent on the tax estimate. When presenting the autumn tax estimate, he emphasized that there was “no new scope for distribution” for the 2024 federal budget. If it continued, cuts would have to be made elsewhere.
FDP parliamentary group leader Christian Dürr told the “Bild” newspaper that citizens’ money could be saved, for example by integrating Ukrainian refugees and asylum seekers into the labor market more quickly. This could be a win-win situation, “because employees are desperately needed, especially in the catering industry.”