German lawmakers consider slashing restaurant taxes

The German parliament is discussing a plan to permanently lower sales tax on restaurant food to the same level that it was at during the coronavirus pandemic.

The move is part of a broader effort to support businesses and consumers facing inflation, high energy costs and weaker purchasing power.

Ministers have already approved draft legislation from Finance Minister Lars Klingbeil that would reduce the tax on food served in restaurants from 19% to 7%.

The measure still requires parliamentary approval. It forms part of the policy package negotiated in the coalition deal between Chancellor Friedrich Merz’s conservative bloc and Klingbeil’s center-left Social Democrats.

The coalition, which took office in early May, has made reviving Germany’s slowing economy a central priority.

During the coronavirus pandemic, sales tax on restaurant food had been temporarily cut to 7% to help the sector through lockdowns, but after the end of restrictions the rate returned to 19%.