Removing VAT on basic foodstuffs would lift every private household by a low double‑digit amount each month. Economist Tobias Hentze from the Institute of German Economy (IW) told “Die Welt” that, taken over a month, the savings could amount to 15 to 30 € depending on household size and purchasing habits.
He estimates that the state would face a revenue loss of up to 16 billion €, a figure echoed by tax expert Friedrich Heinemann of the Center for European Economic Research (ZEW). In a per‑capita analysis Heinemann said households could save about 15 to 20 € per month, which would translate into a fiscal loss of around 17 billion € per year.
Both researchers are doubtful that a drop from seven to zero percent would be fully passed on to consumers. Heinemann expects that about half to three‑quarters of the savings would reach shoppers, while IW scholar Hentze warns that a portion of the cut may not surface in final prices. “Carry‑over effects are likely, since such a cut would only amount to a few cents on many products” he added. In any case, the benefit would wear off quickly as producers and retailers adjust prices to increased production or labour costs.
Union faction leader Jens Spahn (CDU) has floated a full elimination of VAT for basic food. “In a package I can see VAT on basic food dropped to zero” he told “Die Welt am Sonntag”, adding that this measure could help stem inflation, which is rising again as oil and fuel prices climb in the wake of the Iran war.
