The increase in the CO2 price and the return to the regular sales tax rate will cause tax revenue to rise sharply in the coming year. A total of over 7.2 billion euros.
A return to the regular sales tax rate in the catering industry and for gas and district heating as well as a greater increase in the CO2 price are likely to mean significant additional revenue for the state. According to information from the federal government, the changes expected at the turn of the year could lead to around 7.2 billion euros in additional revenue next year.
If the sales tax reduction from 19 to 7 percent in the catering industry that has been in effect since the Corona crisis was maintained beyond the turn of the year, public budgets would have to forego a further 3.4 billion euros in tax revenue next year, according to the Federal Ministry of Economics’ response to one Question from Bundestag member Sahra Wagenknecht. It was available to the German Press Agency.
If the usual VAT rate of 19 percent is applied again for gas and district heating from January, instead of only in April as originally planned, this will bring in additional revenue of 2.5 billion euros. In addition, according to the government’s response, an additional 1.3 billion euros will flow into the state treasury through the larger increase in CO2 prices for heating and refueling. At the turn of the year, the CO2 price is to rise from 30 to 40 euros instead of 35 euros per tonne as initially planned.
In the catering industry, the reduced sales tax revenue “and thus the relief for private consumers” since the reduction in VAT in July 2020 is estimated to total a good nine billion euros, writes the Ministry of Economic Affairs.
Source: Stern
