Business

Ifo President Fuest advocates for abolishment of reduced VAT rate

Clemens Fuest, head of Ifo, calls for the elimination of the reduced VAT rate on food and suggests targeted relief for low-income earners instead.

6 August 2026Tagblick Newsdesk

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Archive photo: Ifo President Fuest advocates for abolishment of reduced VAT rate — Archive photoPhoto: Institut der deutschen Wirtschaft Köln · Wikimedia Commons · CC BY 2.0

Ifo President Clemens Fuest has advocated for the abolishment of the reduced VAT rate. The economist argues that unifying the VAT rate for all food items would lead to higher prices for products such as bread, butter, and fruit.

However, Fuest emphasizes that households with low incomes should be compensated through state relief measures. These initiatives aim to ensure that affected social groups are not disproportionately burdened while also allowing for budget gaps to be closed.

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