Relief package from the Federal Environment Agency: This is how the affected sectors are reacting

The authority’s president, Dirk Messner, justified the tax relief package with climate protection. What is environmentally friendly should become cheaper, what is environmentally harmful should no longer be subsidized by the state with taxes that are too low, he said.

Specifically, vegetable staple foods such as fruit, vegetables, cereal products and vegetable oils as well as public transport should be completely exempt from VAT. In return, the UBA is calling for the subsidization of environmentally and climate-damaging products to be phased out “at a later date”.

This applies in particular to the reduced VAT of seven percent for meat and other animal products, which would in future be taxed at the regular 19 percent. Vegetable products only have a fraction of the “climate footprint” compared to animal products.

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In addition, the UBA advocates exempting solar systems from VAT and promoting the energy-related renovation of buildings and apartments with the reduced tax rate of seven instead of 19 percent.

What do affected sectors say about the proposed measures – an overview:

The trade

The German Trade Association (HDE) has clearly criticized the proposal by the Federal Environment Agency (UBA) to give foodstuffs such as fruit and vegetables tax privileges and make meat more expensive for ecological reasons. “VAT is the wrong adjusting screw. We don’t believe in suggesting a certain type of diet to customers via the amount of VAT,” said HDE General Manager Stefan Genth to the Handelsblatt. “What people want to eat, when and how much is, from our point of view, a private decision.”

>> Read also: Turbo for energetic house renovation: Authority for massive tax breaks

With a view to a possible VAT reform, Genth warned of “considerable costs” for companies. “The VAT law in Germany is already complicated and the administration with costs of one to four percent of the turnover for the company is expensive enough,” he said. “The traffic light coalition should better use other measures to relieve households that have low incomes and are therefore particularly hard hit by the current inflation.”

energy and water management

Kerstin Andreae from the Federal Association of Energy and Water Industries (BDEW) considers the idea of ​​using price signals to encourage climate-friendly behavior to be fundamentally good. “However, a comprehensive reform of the VAT can be very complex to implement and ultimately lead to social imbalances,” said the chairwoman of the BDEW general management to the Handelsblatt.

From BDEW’s point of view, it would make sense to examine a reduction in VAT for increasingly green electricity. “Inexpensive electricity would not only relieve households and the economy, it is also at the beginning of many value chains and would have a price-lowering effect on many products,” explained Andreae.

In addition, the expert is convinced that cheap green electricity could boost the replacement of fossil fuels in the areas of heating and transport. “This would make the purchase of heat pumps and electric vehicles even more attractive.”

solar economy

The German Solar Industry Association (BSW) welcomed the idea of ​​exempting the purchase of solar systems from sales tax. “It would then be important that the exemption not only refers to solar modules and solar collectors, but to the system as a whole,” said BSW general manager Carsten Körnig the Handelsblatt.

In the case of thermal solar systems, where solar radiation is used to produce heat or hot water, the reduction or elimination of VAT would “really reduce the initial costs and would improve the competitiveness of this very efficient technology”.

The BSW also campaigned for VAT exemption for photovoltaic systems. For private households, this would be “a sensible reduction in bureaucracy and costs, not only for the system operators, but also for the financial administration, and would be a piece of the puzzle in removing the numerous obstacles,” said Körnig

housing industry

In contrast, the Central Association of the Housing Industry (GdW) considers a reduction in VAT in certain areas to be an “effective and fair means” of providing targeted incentives. “In this way, the expensive energetic refurbishment of buildings could be made more affordable and brought forward,” GdW President Axel Gedaschko told the Handelsblatt.

The GdW says: In the course of the explosion in construction costs and energy prices, the state is currently generating high income from VAT anyway. A targeted reduction would support building owners on the way to climate neutrality and ultimately relieve tenants and consumers.

Gedaschko also renewed his demand to reduce the sales tax for fuel for a limited period of time for one heating period to relieve households entitled to housing benefit and many other low-income households.

The proposals of the Federal Environment Agency: vegetables cheaper, meat more expensive

In addition, the CO2 tax should be suspended for a limited period of one year in order to avoid further burdening of people. “In view of the sharp rise in energy costs, the levy can no longer have any significant steering effect,” said Gedaschko. The massive financial burden caused by the exploding energy costs reaches far into the middle of society. “Therefore, relief beyond the previous groups of recipients is necessary.”

construction industry

Felix Pakleppa, General Manager of the German Construction Industry Association, would welcome an “ecological relief package for homeowners”. “Many years ago, we called for restructuring measures to be subject to a reduced VAT rate,” he told the Handelsblatt. “However, this must apply equally to all remedial measures; Individual, politically particularly opportune measures must not be given preferential treatment.”

>> Read also: Taxes, rent and heating costs: This is what homeowners, tenants and builders can expect

Pakleppa also called for all measures on the building shell to be included in such a package of measures. “Such a package has to be worked out very carefully and designed for the long term,” says Pakleppa. “Investments need clear framework conditions. Otherwise, a flash in the pan will be sparked and a run on certain measures will be triggered, which can then no longer be satisfied.”

The heating industry

The Federal Association of the German Heating Industry (BDH) also considers tax breaks to be a lever towards climate protection. However, such a measure should “by no means replace the successful funding programs”, the association explained when asked.

The investment costs are the decisive factor for many households when buying a new heating system, it said. In the past two years, the newly launched Federal Funding for Efficient Buildings (BEG) has provided for a significant revival of the market in the direction of increasing efficiency and climate protection.

In principle, such a measure as the reduction or cancellation of VAT for all efficient heating technologies that achieve energy savings and thus emission reductions in modernization should be implemented, according to the association.

Agricultural

A few weeks ago, the farmers’ association rejected a VAT exemption for certain foods. “Ideally, all food should be subject to the reduced tax rate,” said the Secretary General of the German Farmers’ Association, Bernhard Krüsken.

The Bund Ökologische Lebensmittelwirtschaft (BÖLW) is skeptical about a tax break for all plant-based foods. “Conventionally produced foods would also benefit from this, in some cases with considerable environmental damage,” said BÖLW board member Peter Röhrig recently to the editorial network Germany (RND).

Because by no means only low earners benefited, the abolition of VAT as a socio-political measure was too imprecise, Röhrig continued. The step also costs many billions of euros per year: “Ultimately, this money would not be available for the urgently needed transformation of agriculture and food.”

More: What you should now consider when replacing oil heating and gas heating

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