Germany’s Green Party has voiced strong criticism of a proposed reduction in value-added tax (VAT) on food served in the hospitality sector, currently at 19% and slated to fall to 7%. Stefan Schmidt, tourism policy spokesperson for the Green parliamentary group, described the move as “irresponsible policy for our country” and characterized it as narrowly focused client politics.
Concerns have been raised about whether the tax reduction will translate into lower prices for consumers. The German Hotel and Restaurant Association (Dehoga) has indicated that price decreases are not guaranteed, stating they will largely depend on broader cost trends, particularly regarding materials and labor.
Despite these concerns, the government remains committed to implementing the VAT reduction as of January 1, 2026, according to a response provided to a recent inquiry from the Green Party. Internal government discussions concerning a specific implementation timeline are ongoing and will be finalized “at the appropriate time.
Schmidt labeled the tax cut a “costly election gift” citing calculations from the German Economic Institute (Institut der deutschen Wirtschaft) which estimate potential annual revenue losses for the state of up to four billion euros.
