🚨 Attention all food enthusiasts! 🚨
brace yourself for some tough times ahead 😟! Strengthen your stomachs and tighten your wallets, as eating out is about to become a luxury, not a casual outing.
The new year isn't looking too promising for restaurant lovers. The traffic light coalition government has decided to phase out the reduced VAT rate on food, meaning we'll be paying the tax office a hefty 19% again. That's a major blow, with a whopping 12% increase on the previous rate.
So, why the sudden change? The federal budget has an enormous 60 billion euro hole to fill. To plug this financial gap, the government has no choice but to cut back on expenses. And the catering industry is one of the unlucky victims.
Restaurant owners now face a difficult choice: either pass the higher costs onto their customers or cut back on quality. According to Rene Kaplick, the head of Gastro-Piraten, many restaurateurs are considering quitting or only offering a delivery service.
Feeling dejected yet? You're not alone. That's why Rene and other gastronomy associations are urging all restaurateurs to take a day off on Monday. Daniel Schade, the President of the German Chefs' Association, is backing this initiative: "Sure, the increased VAT might be manageable. But fair wages? I can hardly afford that."
Martina Zahn, the co-initiator of this movement, isn't thrilled about the price hike: "I can just about swallow the VAT increase, but how do I pay my staff fair wages then? I don't want to raise my prices, I want to be a restaurant for everyone, not just the rich."
Other supporters of the restaurant strike include Olaf Seibicke, a hotel manager, and Oliver Röder, President of the JRE-Jeunes Restaurateurs. Gritt Englert, managing director of Laubenbräu Leipzig, is equally concerned: "I thought the 7% rate would be extended, as Scholz initially promised. Now, we're left with no air to breathe and deceived by the politicians."
Adrien Hurnungee, a top chef from Frankfurt, shares his disappointment: "I'm closing my restaurant on December 31, 2023, as the business won't be sustainable with fewer customers and escalating costs."
The strike has led to an increase in interest in home cooking and DIY meal delivery services, as people seek to cut back on dining-out expenses. Some hotels are also offering enticing promotions to attract customers during the upcoming strike.
Stay tuned for more updates on the restaurant industry and its struggle with the increased VAT rates!
Sources:
Enrichment Data:
- Historically, restaurant and catering services have been subject to a reduced VAT rate of 7% since July 2020 due to the pandemic crisis.
- The reduced VAT rate on food was extended until December 31, 2023.
- There is an upcoming VAT increase on confectionery and chocolates, scheduled for June 1, 2025, rising from 14% to 25.5%.
- The VAT rates for services such as education, installation, and some supplies have been modified to comply with the German VAT legislations since January 1, 2025.
