Only 13% of people believe that the temporary VAT reduction in the gastronomy sector, in effect for about two weeks, will lead to lower prices. This comes from a study by the Nuremberg Institute for Market Decisions (NIM), obtained by AFP on Thursday. According to the findings, 41% of people in Germany think the tax cut will at least help keep food prices in restaurants stable despite rising overall costs. Meanwhile, 38% expect higher profits for the operators of restaurants, bars, and cafés.
Experts in Nuremberg further noted that roughly the same share of respondents expect either “minor benefits for themselves in the form of stable prices” or “advantages for the businesses through improved earnings situations.” This means that people in Germany are, “surprisingly,” largely “indifferent to rather positive” about the measure, even though its broader economic impact is viewed with widespread skepticism among specialists.
The VAT on food served in restaurants and cafés was permanently reduced to the discounted rate of 7% on January 1. The rate for beverages remains 19%. The federal government, led by the CDU/CSU and SPD, aims to support the gastronomy sector with this measure, which was included in the coalition agreement at the insistence of the CSU. Industry associations welcomed the change, while the opposition and economists criticized it as an election gift.
According to the survey, 29%, or about one in three, expect to visit restaurants more often in the future. Another 41% are undecided, and 38% consider it unlikely that they will do so more frequently. These are described as “cautious signs of hope” for the sector, though the study notes that this trend is likely only partly related to the VAT reduction, as people do not expect significant price declines.
The survey included 1,010 respondents across Germany between January 2 and 7, representing the national population.
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