"No tax on fruit and vegetables" demands the Hamburg consumer advice center
Created: 04/27/2022, 07:44
By: Kevin Goonewardena
Associations are demanding that vegetables and fruit should be exempt from VAT in the future.
But there is also criticism of the idea.
Hamburg – Not only fuel, energy or the prices for baked goods such as bread and rolls have risen in recent weeks.
Other foods have also become more expensive.
The reason for this is the Ukraine war.
In order to relieve the citizens, politicians are planning various measures.
The energy flat rate is intended to help cushion the increased expenses for electricity and gas, reductions in fuel and diesel are planned and the so-called 9-euro ticket is intended to benefit commuters.
Because of the high prices for fruit and vegetables, Federal Minister of Agriculture Cem Özdemir is now calling for the still valid VAT to be reduced from seven percent to zero.
According to Özdemir, the VAT on fruit and vegetables should no longer apply, as reported by 24hamburg.de.
Surname: | Value Added Tax (VAT) |
Introduction in Germany: | January 1, 1968 |
Height at launch: | 10 percent |
Amount of VAT today: | 19 percent, reduced 7 percent (food, books) |
In times of crisis: tax cuts are a welcome means – the Hamburg Consumer Center agrees
The top Greens politician is thus joining a demand that has been brought into play by various sides in the course of the Ukraine war in recent weeks.
Politicians, scientists and associations welcome the demands - but by no means uniformly.
There are also critical voices against the abolition of VAT.
Tax cuts themselves are an instrument often used by governments in times of crisis to counter increased costs.
In the course of the Corona crisis, the VAT rate was reduced from 19 to 16 percent.
And even with the current relief package, tax cuts are part of the instruments used: for example, the energy cost flat rate is deducted from income tax.
Value added tax on fruit and vegetables: business associations and consumer centers are demanding abolition
The proposal to temporarily abolish VAT on fruit and vegetables is not only welcomed by Federal Agriculture Minister Cem Özdemir.
The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, shares the demand, as he revealed in an interview with the "Augsburger Allgemeine".
"The federal government should temporarily abolish the reduced VAT rate of seven percent, as this would make food and other basic necessities cheaper and help people quickly and unbureaucratically."
Marcel Fratzscher, President of the German Institute for Economic Research
Social Association: People no longer know how to pay bills
Compared to the previous month, consumer prices in Germany rose by 7.3 percent in March 2022.
The latest figures confirm this.
Due to high inflation - the term indicates the rate of increase - people with little financial means no longer know how to pay their electricity bills and groceries.
The president of the social association VdK, Verena Bentele, told the German Press Agency (dpa).
These included low-income earners, pensioners and recipients of basic security.
"The VdK therefore calls for a drastic reduction in VAT on basic foodstuffs, namely to zero percent.
The federal government must make full use of this opportunity, which is now available to all EU member states," said the association's president.
Verbraucherzentrale Hamburg also cites nutritional and environmental protection reasons
The Federal Association of Consumer Centers is one of the many advocates of the temporary abolition of VAT on fruit and vegetables, the rate of which is currently seven percent.
The Hamburg state association also supports the abolition of VAT on fruit and vegetables and stated on Facebook that this measure would relieve household budgets, healthy eating would be cheaper and predominantly plant-based food is good for the environment.
High prices: Cem Özdemir (Bündnis 90/Die Grünen) is in favor of abolishing VAT on fruit and vegetables.
(24hamburg.de montage) © Marijan Murat/Jens Büttner/dpa
Instead of abolishing VAT: These ideas are floating around
But there are also voices that do not see the abolition of VAT on fruit and vegetables as a suitable means of counteracting the increased prices.
The Vice-President of the Kiel Institute for the World Economy, Stefan Kooths, advocates a different method in the "Rheinische Post".
"If the state wants to do something effectively to combat higher food prices, then it should think about freeing up agricultural land," said Knooths.
Because the rising prices would reflect a greater shortage that the state cannot eliminate, he explains.
VAT on fruit and vegetables: trade association HDE against it
The umbrella organization of the German retail trade, the German Retail Association (HDE), is unsurprisingly critical.
Turning the VAT screw is the wrong way.
This would also benefit households that could bear the rising prices.
Instead, the federal government should increase state transfers accordingly.
