BundesChancellor Friedrich Merz (CDU) said in a government survey on Wednesday that he has not ruled out a rise in the value‑added tax, a view that drew sharp rebuke from his own party and the coalition partner, the Social Democrats (SPD).
“An increase in the VAT would be the wrong direction” Merz told the “Stern”. “It would primarily burden ordinary people in their everyday lives”. He added that higher fuel costs and rising electricity and heating bills mean that relief in one area does little to offset the losses elsewhere, leaving families with less cash in their pockets.
Thessaly’s Minister President Mario Voigt (CDU) echoed Merz’s criticism, telling the “Stern” that a higher VAT would unjustly impact everyday citizens. He said, “Fuel costs go up, so do electricity and heating bills – any relief elsewhere helps little, and ultimately people have less money”.
The SPD’s top candidate for the position of Governing Mayor in Berlin, Steffen Krach, was even more forceful. He told the “Stern” that anyone proposing a higher VAT fails to understand the reality of millions of people with low and medium incomes. “I expect the federal government to present clear proposals to effectively cap energy prices and rents, curb market abuse, and quickly ease the burden on small and medium‑income households” Krach said. “A VAT hike would only have the opposite effect, and I strongly advise against it”.
Other key figures voiced similar apprehensions. Mecklenburg‑Western Pomerania’s Minister President Manuela Schwesig (SPD) and Saxony’s Minister President Michael Kretschmer (CDU) spoke at a Berlin event on Wednesday. Schwesig declared that a higher VAT “under no circumstances” could be introduced. Kretschmer agreed, saying it was the antithesis of what was needed at the moment, stressing that the proposal did not fit the current urgency.
Merz clarified during the interview that the government had not excluded any options. He reiterated that the clear goal is to provide relief for both people and businesses. While he refused to give concrete details, he pointed out that the already reduced VAT rate might further decline.