Debate on fuel prices: Rich want to reduce VAT on fuel

In the face of high fuel prices, politicians have promised relief - but it is unclear what that might look like. According to the head of the Union parliamentary group Frei, Minister of Economic Affairs Reiche is now also in favour of a temporary reduction in VAT. In view of the high fuel prices, Federal Minister of Economics Katherina Reiche has proposed a temporary reduction in VAT. The tax on fuels should be reduced from 19 to seven percent, said the CDU politician on the sidelines of the G20 energy ministers' meeting in Houston (USA).

This would act directly at the pump and relieve the burden on citizens and the logistics industry. Reiche acknowledged that pre-tax deductible companies did not directly benefit from a sales tax reduction. For this reason, ways are being examined to relieve the burden on the medium-sized transport industry in a targeted manner. Rich rejected a fuel price cap.

Such a cap weakens the medium-sized refinery industry and has already failed in other EU countries. They are also not convinced by an excess profit tax. This is legally uncertain and prevents necessary investments in more refinery capacity in Germany. For people with low incomes, she also brought up a direct payout mechanism again, which should be operational at the beginning of next year.

Lowering the energy tax could help Previously, Union leader Thorsten Frei had called for a reduction in the VAT on petrol and diesel as a relief for the high fuel prices. Another option is to reduce the energy tax again, the CDU politician told the TV channels RTL and ntv. We now have to decide very quickly, "because we are dealing with an acute problem that has become even more acute". Frei acknowledged that lowering the VAT rate on gasoline and diesel would be expensive for the state.

"Nevertheless, I believe that the greatly increased prices also lead to additional revenue in the field of VAT. That is why, in my view, it would make sense to return this additional revenue generated by the state to the taxpayers," he explained. Consumer advocates also demanded targeted assistance Consumer advocates also demanded targeted assistance for households in need. "Consumers have been suffering from high prices in various areas of life for several months now," Ramona Pop, head of the German Consumer Association (vzbv), told the Neue Osnabrücker Zeitung.

However, a sole focus on relief in fuel prices should not be the answer. The government must take a long-term and comprehensive look at the development of the cost of living. Green Party co-leader Katharina Dröge also proposes a similar direction. She argued for an immediate reduction in the electricity tax, but also for an excess profit tax.

"It is high time for an excess profit tax for oil companies." The revenues would have to reach people directly via so-called energy money - and not in weeks or months. “That's why we're calling for a power tax cut right now.”