FDP against value added tax relief for foodstuffs

In the debate on the rise in food prices, the FDP, co-governor, refuses an exemption from VAT for certain products. Faction leader Christian Dürr told the Neue Osnabrücker Zeitung (Friday): “Unfortunately, the VAT reduction is not a targeted measure to relieve low-income people.”

He also said that the reduced tax rate during the Corona pandemic had barely made itself felt in people’s wallets. Asked on Friday, the FDP-led Federal Finance Ministry only referred 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 zero per cent VAT for food products such as fruit and vegetables. Agriculture Minister Cem Özdemir (Greens) backed the claims, saying: “If we make fruit and vegetables cheaper, not only do we relieve consumers at a lower cost, but we also promote healthy eating through to the resulting orientation effect. 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 this is needed now.” He added that the second relief package announced by the coalition was not enough. FDP politician Dürr, meanwhile, pointed out that both packages contain measures for families and households that are going through a particularly difficult time. “It makes more sense in any case than a VAT quilt.”

The standard rate is 19%. The reduced rate of 7% subsidizes products that serve the common good – including basic goods such as milk, meat, fruits, vegetables and baked goods.

General secretary of the German Farmers’ Association, Bernhard Krüsken, said: “Ideally all food should be subject to the reduced tax rate.” However, he said it is equally important to finally break the “impasse” over a system of financing livestock restructuring. The traffic light coalition is discussing a model so farmers don’t have to incur additional costs for higher standards. According to the recommendations of a commission of experts, an animal welfare tax on products of animal origin is under discussion. A surcharge of 40 centimes per kilogram of meat would be possible.

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