Giffey advocates for equal sharing of discharge expenses
Berlin - Berlin's Senator for Economics, Franziska Giffey (SPD), urges caution in implementing the proposed tax reliefs by the federal government for the hospitality industry and car commuters, emphasizing the importance of safeguarding the state budget. While she supports the measures, Giffey emphasizes the necessity to avoid overburdening the states with the costs.
Giffey defends the proposed increase in the commuter allowance by the black-red coalition, stating it is a nationwide-oriented measure implemented to address the lack of adequate public transportation options in large federal states. She also welcomes the planned reduction in VAT for restaurant meals, citing the impact on the numerous individuals employed in the hospitality sector.
The capital, Berlin, has recently had to make significant budget cuts, particularly in culture, education, and transport. To minimize these cuts, Giffey highlights the critical role of the 500 billion euro special fund for infrastructure investments from the federal government. She calls for swift implementation to facilitate the execution of essential state measures supported by the federal government.
Economic Relief Measures for Hospitality and Commuters
The German government's economic relief measures for the hospitality sector and car commuters aim to stimulate economic recovery and ease financial pressures on businesses and workers. Key measures include reintroducing a reduced VAT rate of 7% for food served in restaurants and cafés from January 1, 2026, and increasing the commuter allowance for car commuters. The hospitality sector is challenged by high energy costs, rising wages, and global food price increases, while the increased commuter allowance offers direct financial support for workers facing increased fuel and transportation costs.
Fiscal and State Budget Impact
The relief measures will lead to reduced VAT and tax revenues for the state, as indicated by the general policy direction. The federal government will implement the measures swiftly as part of a broader package aimed at fostering business relief and reducing bureaucratic obstacles. The government recognizes the temporary reduction in public revenues, viewing these measures as essential support for economic recovery and maintaining consumer and business confidence in the current economic climate.
Giffey advocates for the approved rise in the commuter allowance, justifying it as a nationwide move to alleviate insufficient public transportation options in larger states. She also supports the planned VAT reduction for restaurant meals due to its potential positive impact on the employed workforce in the hospitality sector. Despite the need for caution in implementation, Giffey encourages swift utilization of the 500 billion euro special fund for infrastructure investments to minimize budget cuts in Berlin, ensuring the execution of vital state measures backed by the federal government.
