Ifo Chief Calls for Lower Food VAT Rate
Clemens Fuest, head of the Ifo Institute, wants to change Germany’s tax system. He proposes raising the value-added tax (VAT) to 19%. He believes this would help the government solve budget problems.
Clemens Fuest, the president of the Ifo Institute, is calling for a significant shift in how Germany collects taxes. He wants to remove the current reduced VAT rate of seven percent. This change would increase the VAT to 19% for all goods. Fuest estimates this would generate around 36 billion euros each year for the government. He suggests using this money to help people who need assistance instead of the current reduced rate.
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Highlights
Fuest Wants Higher VAT
Clemens Fuest suggests increasing the value-added tax to 19%.
VAT Increase for Revenue
A uniform 19% VAT would generate 36 billion euros annually.
Reduced VAT to End
Clemens Fuest argues for the abolition of the reduced VAT rate.
Supermarket Price Increase
Consumers would pay more in supermarkets if the reduced rate ends.
Targeted Relief Proposed
Fuest suggests help for people who need it instead.