With a VAT reduction to stimulate the economy in the Corona-crisis in Germany. Criticism comes from the boss of the control of the Federal government.

The Federal government has put together a stimulus package , in order to bring the economy on track. Belongs to the actions a reduced VAT for six months – until the end of December 2020. The chief of the Federal government for this Instrument, criticism are left – and expected to “disillusionment”.

The coalition tips the Federal government agreed last week to a stimulus package with the amount of 130 billion euros, the economic consequences of the Corona-pandemic* to cushion. The financial support includes the purchase, among other things, a family bonus of 300 euros per child, cash assistance for the municipalities and also a car bonus- although not for vehicles with combustion engine.

VAT reduction in the Federal government: to Implement without “friction losses”?

another important means of strengthening the German purchasing power of the temporary reduction in VAT, from 1 is. July should come to the end of the year. The President of the taxpayers Association of malt in this regard, however, a gloomy picture on the wall: “I doubt that the VAT reduction will be implemented in this speed really well and without friction losses,” explains Reiner wooden nail to image.

+ Reiner wooden nail, the head of the taxpayers Association, is critical of the planned VAT reduction.©dpa / Britta Pedersen

the implementation of The government action* of just one month, the 43-Year-old thinks is “very, very ambitious”. This is because the companies would not be able to implement the tax cut as fast as you was decided. Not only the trade would have problems with the effort, as the official explains: Also from the Bundestag, it would give to critical voices. For wood, nail the sales tax was “law of the most complicated tax law” in Germany.

economic stimulus package: wooden nail expects higher prices after VAT reduction

A “very problematic” point of the Chairman of the taxpayers Association also in the case of the temporary nature of the reduction of the VAT from a half a year looks . “More effective would it be if you, say, similar to the gastronomy, it is a year in there. Then it’s worth it, of course, the prices change. But only a year and a half I think is very difficult,” says wood, nail – and expects the consumer in terms of Inflation, negative impacts:

“Make no mistake about it: When the tax rate moves back up, which, in turn, will benefit many, and then again the prices pull up,” he predicts spiral of a rise in price. It is doubtful, moreover, whether and in what amount the reduction of the VAT hits at all on the price policy.

Mainly in the higher-priced Segment would tumble accordingly, the “prices,” but not for the already affordable products, such as, for example, food. Justification: It is there, finally, only the cents and the cost of this would be conceivable high.

“When it comes to the implementation, is disillusionment because of the” – also in the economic stimulus package?

The sobering judgment announced the policy measure reduced VAT is not finished: The stimulus package in the Wake of the Corona-crisis was basically correct – when it comes to the care, attested by the head of the Federal government the Federal government* however, negligence on the part of: “Sometimes you do it at night in the Chancellery something simple, great programs, all should rejoice in. When it comes to the implementation, is there .“

there Is an Alternative, which would boost the purchasing power of the German population in a more meaningful way? Reiner wooden nail does not want to niggle the himself has said, “but to help it is constructive to implement”. As picture (article behind paywall), describes more, would have shown the Association of taxpayers, a – retroactive – abolition of the solidarity contribution in a much more effective method is to let the people more money.


*Merkur.de a service of the nationwide Ippen Digital editors ‘ network

section list image:©dpa / Britta Pedersen