The planned tax reduction for natural gas will lead to cost savings for private consumers. However, trade associations criticize the signal for gas consumption.
Business associations have described the reduction in VAT on gas announced by the federal government as giving the wrong signal. At the same time, they called for targeted relief for companies.
“Saving gas remains important. The relief from the announced lower value added tax goes unnoticed by the companies because companies do not pay any value added tax,” said Holger Loesch, deputy general manager of the BDI, the German press agency.
According to Loesch, companies are struggling with escalating energy costs. “Politicians must now consistently maintain the competitiveness of industry and relieve companies in need of protection.”
Gas is scarce
The director of the German Economic Institute, Michael Hüther, criticized: “Gas is currently a scarce commodity, so the price is high.” In order to get through the next winter well, gas must be saved. “Why in this situation the price is reduced via VAT is not clear from an economic point of view,” said Hüther of the dpa. Chancellor Olaf Scholz (SPD) is not giving an incentive to save, on the contrary. “At the same time, the accuracy of this tool leaves a lot to be desired. Instead of the bazooka, we need targeted support, for example for low-income earners who suffer most from inflation.”
The federal government wants to reduce value added tax on natural gas for a limited period, as Scholz said on Thursday. The reduced VAT rate of 7 percent is to apply as long as the state gas levy is levied, i.e. until the end of March 2024. With the gas levy, importers will be able to pass on higher procurement costs due to the Ukraine war to consumers from October.
gas consumer
The taxpayers’ association rated it as positive that the additional burden on gas consumers should be “slightly lessened”. “Nevertheless, it must not be forgotten that the new gas surcharge will increase the burden on consumers overall,” stated Association President Reiner Holznagel. Chancellor Scholz, on the other hand, had spoken of the fact that “with this step” gas customers would be relieved overall to a much greater extent than the additional burden caused by the surcharges.
The family entrepreneurs demanded a hardship clause for companies that were particularly affected by a complete exemption from the surcharge. In addition, further aids would have to be developed. “The current government must not lose sight of the companies in its relief plans,” said association president Reinhold von Eben-Worlée. The economy would not be helped at all by reducing only the value added tax for gas. “This tax does not play a role for companies entitled to input tax as an item that is ultimately passed through.” The gas surcharge, however, causes a considerable weakening of the business location.
Loesch demanded that the federal government should reduce the amount of the surcharge and extend the duration of the survey. The BDI is also demanding that the electricity tax be reduced to the European minimum, that grid fees for all consumers be co-financed by the state and that previous energy tax relief such as peak balancing be continued.
Association reactions
The energy group Eon called the decision of the federal government a correct and overdue step because it leads to a noticeable relief for gas customers. “However, he remains half-hearted because there is also a need for relief when it comes to electricity prices and there is an even greater tax burden on end consumers. Therefore, the electricity tax should be reduced to the European minimum and a reduced VAT rate should also be applied.”
The Paritätischer Gesamtverband pointed out that the reduction in VAT would relieve everyone, “including those who don’t need it at all”. The umbrella organization for welfare advocated targeted help for people “who can no longer pay their gas bills,” it said in a statement published by the “Rheinische Post” (Friday).
The social association VdK called for additional relief for citizens. President Verena Bentele told the dpa that Finance Minister Christian Lindner (FDP) must finally seriously consider an excess profit tax and a property levy in order to have money to relieve the weakest. “In addition, it must be ensured that this time the tax cut really reaches people. It must not go back to the way it was with the tank discount.”
Lindner rejects an excess profit tax on high corporate profits caused by the crisis. Bentele said the association welcomes the federal government’s announced reduction in VAT on gas. It roughly balances out the gas surcharge. “It’s good for the households that are suffering from the high gas prices. But it’s bad for the state budget. We urgently need to talk about income now, otherwise there will be no basic child security, no good citizen’s income and no relief for caring relatives.”
The President of the Social Association Germany, Adolf Bauer, said: “Many people have been in a really serious situation for weeks, sometimes even months. They now need help quickly and immediately and cannot wait until the debates about possible relief measures have been completed.”
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
