Germany’s Green Party has voiced sharp criticism of the government’s proposed reduction in value-added tax (VAT) on food served in the hospitality sector, from the current 19 percent to 7 percent. Stefan Schmidt, the Green Party’s spokesperson for tourism policy, described the move as “irresponsible policy for our country” asserting it represents narrow, targeted politics, according to a report in “Der Spiegel”.
A key concern raised is whether the tax reduction will actually translate into lower prices for consumers. The German Hotel and Restaurant Association has indicated that price decreases are not guaranteed, stating that any such adjustments would be heavily dependent on evolving cost factors, particularly those related to the price of goods and labor.
Despite these reservations, the government maintains its intention to implement the reduced VAT rate beginning January 1, 2026, as revealed in a response to a parliamentary question from the Green Party. Ongoing discussions within the governing coalition regarding a precise implementation timeline are expected to conclude in due course.
Schmidt characterized the potential tax cut as an expensive pre-election measure. Estimates from the Institute of German Economy suggest the move could result in annual revenue losses for the state of up to four billion euros.