19.10.2010: Alliance expert discussion for reduced VAT

More than 20 organizations and corporations met to have an intensive debate concerning reduced value added tax (VAT) on children’s products. All those present were in full agreement that this would be not only of great symbolic meaning for families but also an important relief of the financial strain.

The AGF invited to the meeting, as not only does the relevance of reduced rate of VAT for children’s products remain unbroken, but also a general discussion on VAT is suggested. In its coalition agreement the federal government had announced a commission to review the VAT, whose establishment in recent weeks was on the agenda, however it was postponed. Intensive political and social debate is therefore expected in the course of 2011, so that probably in autumn of 2011 a decision will be expected. The Federal Ministry of Finance had commissioned a study earlier in 2010 at the University of the Saarland, whose results were published in September this year. In it the reduced VAT rate is basically very critically handled and suggested to remove almost all of the reductions. A study by DIW Econ (commissioned by the union for food and Catering – NGG) has calculated that this would especially and disproportionately affect poorer households and pensioners.
There was thus, a lively discussion and much enthusiasm for a signal to families via the application of the reduced rate of VAT on children’s products, at the meeting in the Berlin-Brandenburg Academy of Sciences. Together issues and positions were developed, which are now being refined. All participants were in full agreement to continue working together on this issue. In addition, other partners will be looked for – about 20 other institutions and companies from different sectors have already indicated their interest to engage themselves for this purpose.

Related Links

Study by the University of Saarland on the reduction of value added tax