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ECONOMY

German shops chaff against ‘wasteful’ receipt law

In January it became law in Germany that retailers must print a receipt for every last transaction in a bid to fight tax evasion, but shopkeepers, customers and industry groups are already bucking against the scheme.

German shops chaff against 'wasteful' receipt law
A bakery saleswoman throws till receipts that the customer did not take into a symbolic box on the counter. Photo: Julian Stratenschulte/dpa
“Small shops' cash registers already have electronic chips that tax officials can read any time. Why should we go back to the old system?” asked Christian Koch, owner of Hammett, a specialist crime novel shop in Berlin.
   
“It's a pain, of the 50 tickets I print each day I'll throw 49 straight in the bin,” he added.
   
Even bakers selling rolls for a few dozen euro cents each must now print a receipt for every transaction — even when their customer doesn't want one.  With their high numbers of small sales each day now generating reams of
unwanted documentation, bakeries and snack stands are especially outraged by the change in the law.
   
“I've already emptied this once,” said a worker at Frankfurt sausage stand “Best Worscht in Town”, pointing to a bin overflowing with discarded slips of paper during the busy lunch hour trade.”It's a really stupid idea for the environment.”
 
 Tax evasion
 
Obligatory receipts were voted through in 2016, but the law slipped under the public radar until shortly before it came into effect on January 1. Economy Minister Peter Altmaier asked Finance Minister Olaf Scholz to give up on the plans, especially because receipts printed on thermal paper cannot be recycled.
   
Since then, retailers' federation HDE has also written to Scholz, asking him to exempt businesses that issue more than 500 receipts per day on average.
   
“That's one receipt per minute for a shop open nine hours a day,” the group said in the document, seen by AFP.
   
Until now Scholz has resisted all such calls, saying the fight against tax evasion — estimated at around 10 billion euros by tax officials — must include preventing shops and restaurants from failing to record transactions properly.
   
“I don't think small shops are really trying to get out of paying their taxes,” said Sarah, a shopper at Hammett. “They should worry more about people like Amazon, make them pay their taxes in Germany,” she added.
 
 Costly transition
 
German authorities hope to tighten their grip on money flows through businesses where a large proportion of payments happen in cash, making them more open to tax fraud.
   
In Berlin, retailers are legally required to install tamper-proof cash registers by October, and many have yet to make the switch. “It costs close to 1,000 euros ($1,110) per device, and a lot more if you have to buy a new one,” trades association ZDH told AFP.
   
That represents a “prohibitive” cost for retailers, especially those like a chain of bakeries with 30 or 40 branches, for example, it added. The finance ministry retorts that Austria, Italy, Portugal and other European countries get along just fine with obligatory receipts.
   
But the HDE notes that France plans to gradually phase out the requirement — except in cases where customers explicitly request a paper record.

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ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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