The Limited Times

Now you can see non-English news...

Corona bargain? January brings tax increase and "gigantic wave of discounts"

2020-12-23T22:04:39.398Z


Even though the biggest tax hike in 14 years is due in January, bargain hunters will soon be happy. In one industry in particular, experts are expecting an “unprecedented price slide”.


Even though the biggest tax hike in 14 years is due in January, bargain hunters will soon be happy.

In one industry in particular, experts are expecting an “unprecedented price slide”.

  • Chancellor Angela Merkel *

    and

    Finance Minister Olaf Scholz

    wanted the

    economic

    boost quickly after the first Corona * -Lockdown.

  • Her idea cost her

    20 billion euros

    - VAT was reduced.

  • Economic

    experts are now taking stock and dare to make forecasts for 2021.

Berlin - At the turn of the year, the

biggest tax hike

in 14 years

is due for all consumers

: The

VAT rate

will

be increased

from

16 to 19 percent

on January 1, 2021

, the

reduced tax rate

from five to seven percent.

Admittedly, these numbers are not really new, as they were valid from

2007

to June

30, 2020

.

Due to the

coronavirus pandemic *

and the serious consequences of the first

lockdown in spring

for the German economy, the government temporarily lowered the tax rate.

The idea behind it:

Chancellor Angela Merkel (CDU)

and her

Finance Minister Olaf Scholz (SPD)

wanted to encourage Germans to consume and boost the economy.

In just under two weeks, all

penny foxers are

threatened

with a return to the

status quo

.

However, the balance sheet after half a year with the temporarily reduced

VAT

- unique in German history -

is bitter.

The

federal government has waived

around

20 billion euros

in

tax revenue

, but it has apparently hardly paid off for trade.

The verdict of many

economic

experts is more than harsh - there

is even talk

of a 20 billion euro

error

.

Video: Federal government initiates a reduction in VAT in June 2020

Compared to the

Welt am Sonntag

now explained

Stefan Genth

, the chief executive of the

trade association Germany

(HDE): "Overall, the tax cut could do nothing against the

negative effects

align with the consumption of the pandemic and had only a marginal effect." For most companies, is the The effort was higher than the benefit,

Genth

continued.

His judgment is understandable, as

price tags had

to be recreated and

cash register and debit systems had to be

laboriously reprogrammed.

Who was the VAT cut really good for?

The

drugstore chain

Rossmann

corrected its prices up again months ago.

"

We withdrew

the

three percent discount

in the last week of September - without our customers noticing," the

world was

told there

.

It is not a problem to take back something that nobody notices.

The

VAT reduction

was simply too small, so that neither companies nor private people

really used it

for their

everyday shopping

.

The

fashion trade is also

disillusioned: the government measure had "no effect whatsoever", as reported by the

Breuninger

fashion company, which is represented in many large cities

.

On the other hand, the situation in the

furnishing industry

looks a little different,

the goods that the customer purchases here are more expensive than those when shopping in the supermarket.

Jan Kurth

, the general manager of the

Association of the German Furniture Industry

(VDM), could

note

a significant increase in

incoming orders

for

kitchens

, upholstered furniture and high-quality

home furniture

from July

.

The Germans, who had already planned a major purchase, struck in the last six months.

At prices of several thousand euros, the three

percentage points were

then very noticeable.

Experts see the 20 billion program as a big mistake

Nevertheless.

For the

Advisory Council

of the

Federal Government's

most important economic

advisers

, the

20 billion program

is subsequently impossible to justify.

In an annual report, they criticized the low efficiency of the

tax cuts

, because their "effect on the economy should remain limited".

Higher earners

reacted more strongly to the actually economic aid measure than

low earners

and would probably have bought a new

car

or

kitchen

in 2020 anyway

- as planned.

The

Federal Minister of Finance, Olaf Scholz,

is still firmly behind the decision: “We have made an offer to make

major purchases

despite the

crisis

.

That worked. ”

His ministry

told the

world

that it was a matter of“ promptly

initiating

a significant

economic stimulus

. ”The set goal was achieved.

Video: Economic forecast for 2021

Ironically, the

second lockdown

and the

difficult situation in trade

could prove to

be

the luck of the

bargain hunters

in

2021

- although three percent more taxes will have to be shelled out again from the beginning of the year.

"In view of the high

competitive pressure

, the scope for price increases will be extremely limited," explains HDE boss

Genth

and

even announces "an unprecedented

price slide

"

for

fashion

and

shoes

.

Scientific studies also show that sales tax increases are passed on to customers twice as much as temporary cuts.

“If the shops are allowed to reopen”,

Axel Augustin,

as

spokesman for the textile trade association

, assumes

“a gigantic

wave of discounts

”.

The industry is sitting on a huge mountain of unsold goods.

About 300 million parts remained unsold.

So the

OTTO-Versand announces

Already now to

offer

extensive

special promotions

again and again in the next few months

, the

VAT rate

is only one component of many in the formation of prices.

Only whether consumers will react to the offers remains to be seen - after all, many people tend

to save more

during the

crisis

.

(cos) * Merkur.de is part of the Ippen-Digital network.

Source: merkur

All news articles on 2020-12-23

You may like

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.