In the debate over German VAT rate changes, Union faction leader Jens Spahn (CDU) has suggested a total abolition of the tax on basic food items. “In a comprehensive package I can easily imagine reducing the VAT for basic food items to zero” he told “Welt am Sonntag”.
Spahn argues that this move could help counter rising inflation, which is mounting amid the Iran conflict thanks to higher oil and fuel prices. Low‑income households spend a large share of their earnings on essential goods, rent and food, he said. “Rent is already exempt from VAT. Exempting basic foods could be a sensible addition”.
He cautioned that the overall package will ultimately decide the outcome. The proposal might also include a general VAT hike to address the federal budget deficit, as is often discussed. Lowering the VAT on basic foods-from the current 7 % (compared to the usual 19 %)-would make these items more affordable and serve as a social balancing measure.
“We will now review the various proposals together within the coalition” Spahn told reporters. “There are strong macroeconomic arguments for a VAT increase, and compelling political arguments against it. We will weigh them internally first, then discuss them publicly”.
