Berlin.
Minister Özdemir wants to abolish VAT on fruit and vegetables. Social associations welcome this – but there is resistance.
In Spain the government recently announced that it intends to abolish the four percent value-added tax on staple foods for six months. This applies to products such as bread, vegetables, cereals, fruit, milk and cheese. For pasta and cooking oils, the rate is to be halved from ten to five percent. The aim is to relieve the financial burden on poorer people in particular.
Now the debate is gaining momentum again in Germany. “Personally, I have a lot of sympathy for zeroing VAT on fruit, vegetables and legumes. That would also send out the signal that healthy eating is cheaper. Good nutrition must not fail because of the wallet,” said Federal Minister of Agriculture Cem Özdemir (Greens) in an interview with our editors.
Value added tax: Social association calls for rapid reduction
Özdemir receives support from social organizations and consumer protection groups. The social association VdK is calling on the traffic light coalition to quickly introduce a law for Germany similar to that in Spain. That was “long overdue,” said VdK President Verena Bentele to our editorial team. “In view of inflation of 8.6 percent, the federal government must not hesitate any longer.” Suspending VAT on staple foods helps people with low incomes “disproportionately”.
The Federation of German Consumer Organizations (vzbv) is also pushing for the abolition of VAT. “Healthy and sustainable nutrition shouldn’t be a question of money,” vzbv food expert Christiane Seidel told our editorial team. The abolition of VAT on healthy food could “make at least a small contribution to relief and provide an incentive for healthier and more sustainable nutrition,” says Seidel. The instrument is “very effective and can be implemented in the short term”.
German Diabetes Society: Spanish model is very welcome
The German Diabetes Society (DDG) wants a permanent “healthy VAT” and understands this as a complete exemption from VAT for foods such as fruit and vegetables as well as a simultaneous manufacturer levy on sweetened soft drinks.
In the short term, however, the Spanish model is also “very welcome”, said DDG Managing Director Barbara Bitzer. The German Farmers’ Association supports a suspension of VAT in general. “However,” his deputy general secretary Udo Hemmerling said, “all groceries should then be reduced.”
Resistance from the Federal Ministry of Finance
The German Retail Association (HDE), on the other hand, describes the abolition or suspension of VAT as a “wrong set screw”.
A spokesman stressed that price controls and other energy cost aids are better tools to mitigate the impact of inflation. In any case, VAT law is relatively complicated and associated with high administrative costs. Further interventions could increase these costs.
The Federal Ministry of Finance is also slowing down: The traffic light is currently “not planning” to change the applicable taxes of seven or 16 percent.
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