"Half-hearted measure"

VAT reduction: Retailers praise, FPÖ criticizes

The value-added tax on basic foodstuffs will be reduced to just under five percent. This was agreed by the government during its two-day closed-door meeting. Criticism rained down from FPÖ party leader Herbert Kickl.(Bild: Krone KREATIV/stock.adobe.com APA)

VAT on basic foodstuffs is falling to just under five percent. This was agreed by the government during its two-day closed-door meeting. While retailers are full of praise for this measure, the Freedom Party is voicing sharp criticism.

Which foods will become cheaper has yet to be decided. However, a number of foods have been named for which the tax is likely to be reduced.

These foods are to become cheaper:

• Bread

• Eggs

• Milk

• Butter

• Pasta

• Potatoes

• Apples

Government praises itself
The government is pleased with the measure. After the Council of Ministers meeting, Vice Chancellor and SPÖ leader Andreas Babler pointed out that people had recently had financial problems even when buying basic foodstuffs towards the end of the month, as prices had skyrocketed.

Counter-financing through parcel delivery
Chancellor Christian Stocker (ÖVP) also believes that daily shopping has become a burden. The ÖVP leader was pleased that the counter-financing would benefit domestic trade through the parcel tax on deliveries from third countries such as China. Around 400 million has been set aside for the measure. The shopping basket will be adjusted accordingly.

Daily shopping has become a burden.

Bundeskanzler Christian Stocker (ÖVP)

Bild: APA/GEORG HOCHMUTH

Trade association welcomes measure
Themeasureis welcomed by the Trade Association (HV). "Our retailers will pass on the effects of this tax reduction 1:1 to our customers wherever possible," says HV Managing Director Rainer Will. "The decisive factor for us is that this tax reduction is really permanent and not just temporary."

Our retailers will pass on the effects of this tax reduction 1:1 to our customers wherever possible.

Rainer Will, Geschäftsführer des Handelsverbands

Bild: Zwefo

Meinl-Reisinger puts the stick in the window
Foreign Minister Beate Meinl-Reisinger (NEOS) saw solid counter-financing. She believes retailers are obliged to actually pass on the tax cut to customers. This would mean that the relief would be visible at the checkout every day. If retailers do not comply, there will be a response, as the powers of the competition authority have been massively strengthened.

Rewe CEO: "We guarantee it!"
Rewe Austria CEO Marcel Haraszti expressly welcomed the government's measure. "For years, we have been calling for a permanent reduction in VAT on food, because it brings noticeable and sustainable relief for people in their daily shopping." At the same time, he assured the "Krone" newspaper: "The Rewe Group's retail companies Billa, Billa Plus, Penny, and Adeg will pass on 100 percent of this to our customers, we guarantee it."

The Rewe Group's retail companies are passing on 100 percent of the VAT reduction to our customers.

Rewe-Österreich-Chef Marcel Haraszti

Kickl: "No noticeable relief"
Criticism rained down from FPÖ party leader Herbert Kickl, who spoke of a "half-hearted measure" that would "bring no noticeable relief." His party has been calling for a complete sales tax exemption for basic foodstuffs for years.

The value-added tax on basic foodstuffs will be reduced to just under five percent. This was agreed by the government during its two-day closed-door meeting. Criticism rained down from FPÖ party leader Herbert Kickl.(Bild: Krone KREATIV/stock.adobe.com APA)

FPÖ leader wants to cut funding for asylum seekers and NGOs
The proposed counter-financing would mean that those who benefit from the relief would be burdened again on the other side. Unsurprisingly, Kickl is considering cuts to asylum seekers and NGOs as a means of counter-financing.

This is a half-hearted measure that will not bring any noticeable relief.

FPÖ-Chef Herbert Kickl

Bild: APA/GEORG HOCHMUTH

Greens want to start counter-financing with the "super-rich" 
"If bread, butter, and flour really do end up becoming cheaper, that's good. But one thing must be clear: this plan is expensive," comments Green Party club chair Sigrid Maurer. She would like to see a different form of counter-financing that targets the super-rich. "But if everyone ends up paying more because the government is taking money from people elsewhere, then that is completely the wrong approach."

NGOs: Distinguishing between plant-based and animal-based foods
The NGOs foodwatch and WWF then address the question of which foods should be subject to a tax reduction. Plant-based foods should become cheaper, but a reduction for meat is viewed critically due to the poor climate balance of such products. Greenpeace expressed a similar view, calling for a complete sales tax exemption for plant-based foods. The proposed plastic tax is welcomed.

Chemical industry sees bureaucratic monster
The Austrian Chemical Industry Association (FCIO) takes a different view. The plastic tax is a "bureaucratic monster," according to FCIO chairman Ulrich Wieltsch. "In Austria, tens of billions of packages are put on the market every year. How are such quantities to be technically tested and documented for recyclability?"

For State Secretary for Finance Barbara Eibinger-Miedl (ÖVP), on the other hand, the reduction "provides sustainable relief in addition to our measures for cheaper electricity."

"More fairness in online trade"
Praise for the measure also came from Vienna Mayor Michael Ludwig (SPÖ), Volkshilfe, the Chamber of Labor (AK), the Trade Union Federation (ÖGB), and the GPA union. For its chairwoman Barbara Teiber, the planned levy on third-country packages will lead to "more fairness in online trade."

AK President Renate Anderl wants a thorough review of the measure. ÖGB Federal Managing Director Helene Schuberth is also calling for a powerful anti-inflation commission. Volkshilfe Director Erich Fenninger expressed similar views.