2023-11-18 13:09:03
The economist Marcel Fratzscher expects price increases of around ten percent due to the return to the regular VAT rate on food in restaurants. “Probably 70 to 80 percent of the twelve percentage points that VAT is now increasing in the catering industry will be passed on to customers,” said the President of the German Institute for Economic Research (DIW) to “Spiegel”. Perhaps some restaurants would also have a profit buffer, because “the catering industry has already increased prices significantly more than inflation over the past two years.”
In principle, the expert welcomes the decision by the traffic light coalition not to maintain the VAT rate, which was initially reduced to seven percent due to the corona pandemic. There is no longer any justification for an extension; the Corona crisis is over. At the same time, subsidizing the industry is expensive and “the money is missing somewhere else, for basic child welfare and combating poverty,” he said.
During their budget negotiations on Friday night, the traffic light groups agreed on a scheduled expiry of the reduced VAT on food in the catering industry at the end of the year. The FDP in particular actually wanted to maintain the low rate. Party representatives now referred, among other things, to the Federal Constitutional Court’s ruling on the climate and transformation fund, which means billions in funds are missing from the budget.
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The Union parties, the AfD and the Left had also called for continually lower taxation and argued, among other things, that going to restaurants would become unaffordable for poorer people in the future. DIW boss Fratzscher did not accept this argument. “People who work at minimum wage usually can’t afford the offers anyway,” he told Spiegel. “It is a tax cut that primarily benefits higher earners.”
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