Bavaria's CSU propose abolishing VAT on food in Germany
Just three months before Bavarian elections, the state’s CSU party is calling to eliminate VAT on basic foodstuffs like meat and vegetables - in addition to lower energy taxes and scrapping the inheritance tax for parental homes.
Middle and “all normal earners” are especially in need of relief, said CSU leader Markus Söder on Wednesday at a closed-door meeting of its parliamentary members in the Upper Bavarian monastery of Andechs.
The CSU, the Bavarian sister party of the Christian Democrats (CDU), is calling for "zero VAT" (known in German as the Mehrwertsteuer, or MwS) for all basic foodstuffs.
The tax would be eliminated "not only for vegetables, not only for organic food, but also for meat, for fish, and for dairy products", said Söder.
In doing so, Germany would follow the lead of countries such as Spain - which dropped its VAT from four to zero percent in December in order to tackle rising costs of living.
According to CSU calculations, the possible relief for a four-person household is around €1,000 per year. Söder had initially given an erroneous estimate of €8,000 to €9,000.
"Shopping in the supermarket needs to become possible again,” Söder said. “People must not be afraid and ask, ‘Can I still afford the food this week or next week?"
Despite sinking inflation, prices on dairy, bread and cereal products continue to rise around Germany, with some products increasing by over 20 percent per month. Agriculture Minister Cem Özdemir (Greens) has previously proposed tackling the problem by scrapping VAT on "healthy food" - rather than everything at the supermarket.
READ ALSO: German Agriculture Minister wants to scrap VAT on fresh food
Söder’s proposal goes beyond the CSU’s programme for the Bavarian state elections on Sunday, October 8th, which the party unveiled just a few weeks ago.
CDU party leader Fredrich Merz called the demand "well worth considering". But it’s also being embraced by other parties, such as Die Linke (Left party), which has their main base of supporters in eastern Germany, a region especially hard hit by rising prices.
"I would hope that this would then also reach practice and that people would be relieved," Linke parliamentary group leader Dietmar Bartsch said on RTL/ntv's "Frühstart" on Thursday.
Bartsch said he would be happy if there was an initiative after the parliamentary summer break "and this could really become reality".
Merz also said in the same meeting that higher tax revenues would be “key” to solving some of Germany’s economic issues.
READ ALSO: Why inflation in Germany could slow down despite soaring food prices
Other proposed tax cuts
Söder also called for lower energy taxes, including for the electricity tax to be brought down to the European minimum.
According to Söder, the costs for the German government would amount to around €12 billion, which he called “feasible” without elaborating at the meeting on how it would be financed.
In addition, those who inherit their parents' house or receive it as a gift should not have to pay tax in future, according to the CSU and CDU in a new position paper. Currently the rate is up to 30 percent.
If the heir does not sell the house or flat within ten years, but moves in or rents it out themselves, they should not pay inheritance or gift tax.
"Home ownership is one of the most efficient forms of old-age provision and wealth creation," states the paper, which the CSU calls "Respect Agenda".
Vocabulary
Basic foodstuffs - Grundnahrungsmittel
relief - (die) Entlastung
old-age provision - (die) Altersvorsorge
inheritance tax - (der) Erbschaftssteuer
We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.
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Middle and “all normal earners” are especially in need of relief, said CSU leader Markus Söder on Wednesday at a closed-door meeting of its parliamentary members in the Upper Bavarian monastery of Andechs.
The CSU, the Bavarian sister party of the Christian Democrats (CDU), is calling for "zero VAT" (known in German as the Mehrwertsteuer, or MwS) for all basic foodstuffs.
The tax would be eliminated "not only for vegetables, not only for organic food, but also for meat, for fish, and for dairy products", said Söder.
In doing so, Germany would follow the lead of countries such as Spain - which dropped its VAT from four to zero percent in December in order to tackle rising costs of living.
According to CSU calculations, the possible relief for a four-person household is around €1,000 per year. Söder had initially given an erroneous estimate of €8,000 to €9,000.
"Shopping in the supermarket needs to become possible again,” Söder said. “People must not be afraid and ask, ‘Can I still afford the food this week or next week?"
Despite sinking inflation, prices on dairy, bread and cereal products continue to rise around Germany, with some products increasing by over 20 percent per month. Agriculture Minister Cem Özdemir (Greens) has previously proposed tackling the problem by scrapping VAT on "healthy food" - rather than everything at the supermarket.
READ ALSO: German Agriculture Minister wants to scrap VAT on fresh food
Söder’s proposal goes beyond the CSU’s programme for the Bavarian state elections on Sunday, October 8th, which the party unveiled just a few weeks ago.
CDU party leader Fredrich Merz called the demand "well worth considering". But it’s also being embraced by other parties, such as Die Linke (Left party), which has their main base of supporters in eastern Germany, a region especially hard hit by rising prices.
"I would hope that this would then also reach practice and that people would be relieved," Linke parliamentary group leader Dietmar Bartsch said on RTL/ntv's "Frühstart" on Thursday.
Bartsch said he would be happy if there was an initiative after the parliamentary summer break "and this could really become reality".
Merz also said in the same meeting that higher tax revenues would be “key” to solving some of Germany’s economic issues.
READ ALSO: Why inflation in Germany could slow down despite soaring food prices
Other proposed tax cuts
Söder also called for lower energy taxes, including for the electricity tax to be brought down to the European minimum.
According to Söder, the costs for the German government would amount to around €12 billion, which he called “feasible” without elaborating at the meeting on how it would be financed.
In addition, those who inherit their parents' house or receive it as a gift should not have to pay tax in future, according to the CSU and CDU in a new position paper. Currently the rate is up to 30 percent.
If the heir does not sell the house or flat within ten years, but moves in or rents it out themselves, they should not pay inheritance or gift tax.
"Home ownership is one of the most efficient forms of old-age provision and wealth creation," states the paper, which the CSU calls "Respect Agenda".
Vocabulary
Basic foodstuffs - Grundnahrungsmittel
relief - (die) Entlastung
old-age provision - (die) Altersvorsorge
inheritance tax - (der) Erbschaftssteuer
We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.
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