Federal Environment Agency proposal: Tax relief by abolishing VAT?

Status: 09/06/2022 13:08

Environmentally friendly things should become cheaper and those which are harmful to the environment more expensive. The Federal Environment Agency wants to achieve this by changing the VAT tax. According to the plans, the tax on things like fruit could be completely abolished.

The Federal Environment Agency is offering citizens an ecological package of VAT benefits. By freeing public transport or plant-based food such as fruit and vegetables, private households could save six billion euros a year, said Federal Office President Dirk Messner. The tax reduction should also apply to solar systems, as well as cereal products and vegetable oils.

Lower repair tax

In addition, the improvement of heating systems or the repair of shoes or bicycles should only be subject to the reduced tax rate of seven percent instead of the current 19 percent. “What is environmentally friendly should become cheaper, and what is harmful to the environment should no longer be subsidized by the state with too low taxes,” said Messner.

The “Climate and Environmental Aid Package” focuses on soaring food prices and mobility costs. The background for the proposal is also the current changes in European law, which also legally secure the proposals.

Regular 19 percent on meat

In return for an allowance, subsidies for environmentally harmful products should be phased out – but not until a later date. The reduced VAT of seven percent on meat should be replaced by the usual 19 percent in the future. Plant products only have a fraction of the climate footprint of animal products: for example, one kilogram of beef emits seven to 28 kilograms of greenhouse gases and less than one kilogram of vegetables per kilogram of vegetables.

The Federal Environment Agency says low-income households would benefit most from a VAT exemption on plant-based food. In addition, it would also help people who were relatively unfavorable to the previous two aid packages, such as low-income pensioners. A VAT exemption for public transport would also help poorer sections of the population in particular, who often depend on public transport. They would be relieved above average if public, regional and long-distance transport by bus and train became cheaper.

Business representatives protest

However, some proposals are not well received, especially in business. This applies, for example, to the demands of the Federal Environmental Protection Agency to limit climate-damaging subsidies for transport, among which the authorities include diesel privilege and commuter allowance. Those who demand higher fuel prices, the abolition of commuter allowances and car fares have lost all connection with the realities of hard-working people in our country, criticized the Federal Association of Medium-sized Enterprises, for example.

Gitta Connemann, president of the SME Association of the CDU and CSU, goes one step further. In her opinion, the Federal Environment Agency often exceeds its powers with political demands.

Power should be neutral and act solely on the basis of data and science, according to a CDU MP for the Bundestag: “Unfortunately, the Federal Environment Agency often fails to meet this requirement of objectivity and professionalism. Fundamental ideological criticism is not uncommon. “

With information from Hans-Joachim Vieweger, ARD capital studio

Federal Environment Agency for the environmental reform of VAT

Hans-Joachim Vieweger, ARD Berlin, June 9, 2022 1:15 pm

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