To counter rising energy costs, the Association of German Cities and Municipalities is calling for a temporary reduction in taxes, such as the value-added tax. André Berghegger, the Chief Executive Officer, stated in interviews with the Funke Media Group newspapers that an “immediately effective and time-limited relief” is necessary for citizens, small and medium-sized enterprises, and craftsmen. He proposed a noticeable decrease in energy and basic necessity goods taxes for an initial period of six months. According to Berghegger, this would lower energy costs and provide relief to commuters, artisans, and the economy. Furthermore, he called for a reduction in VAT on food and other daily necessity goods. Berghegger argued that a temporary tax cut yields quick results and is preferable to other proposals, such as one-time payments. He emphasized the need for unbureaucratic measures rather than temporary firefighting fixes. Looking ahead, the CEO warned that the long-term goal must be to make Germany more resilient overall, covering areas such as defense capabilities, civil protection, economic framework conditions, and the energy mix. Although citizens and businesses currently require temporary relief, Berghegger also cautioned that the limitations of the state must remain clear: “No one should expect that the state can buffer all burdens and risks in every crisis situation”.
Municipal Union Urges Temporary VAT Cut to Combat Energy Price Spikes
