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Germany: debate on the tax increase on dairy and meat products

Considering that the agricultural sector is the main responsible for the methane and nitrogen oxide emissions, the German Federal Environment Agency suggests increasing the VAT on animal foods.

2 February 2017
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According to informations published in the foreign news bulletin of the Ministry of Agriculture of Spain, the German Federal Environment Agency (UBA) has submitted the report “Detrimental subsidies for the environment”, that reveals that in Germany they amount €57,000 million.

Considering that the agricultural sector is the main responsible for the methane and nitrogen oxide emissions, that are specially detrimental to the climate, the UBA's analysts suggest, as a measure, increasing the VAT to 19% (versus the current 7%) on animal foods. According to this Agency, a kg of meat causes the emission of between 7 and 28 kg of greenhouse gases (GHG), whilst in the case of fruits and vegetables, they are less than 1 kg. Due to this, they argue that the increase of the VAT to 19% for animal products “would motivate the citizens to reduce the consumption of this kind of products”, and the extra income, that has been estimated at €5,200 million, could be used to reduce the VAT on vegetable products or public transport.

In the face of these suggestions, the Federal Minister of Agriculture has reacted critically, underlining that he does not think that this measure will entail any advantage for the climate, and he pointed out that “an artificial rise of the prices by means of a tax increase will not favour animal welfare, the environment nor the consumers”, and went on to say that he does not expect to dictate fine-like taxes on the German people (“what they may eat or not”). For her part, the Minister of Environment of Germany also criticised the recommendations submitted by the UBA, making clear that “these suggestions are the UBA's ideas, not the Federal Ministry of Environment's ideas”. She considers that several of the measures set out in the report “are not suitable nor appropriate”.

The sector has also reacted critically before these suggestions. The German Farmers' Association (DBV) described as “sensationalist” the UBA's recommendations, and reminded the important contribution of the agricultural sector in the fight against the climate change, having improved, for instance, the efficiency and the exploitation of renewable raw materials.

The German Animal Protection League also evaluated negatively the UBA's ideas, although with a different focus: this association maintains that a duty-like tax burden would not lead, automatically, to an improvement of animal welfare, because the additional fiscal revenue would be dedicated to other purposes that have nothing to do with animal protection. It is also thought that a tax on all the products would also be detrimental to the farming systems compatible with animal welfare, because it would entail a rise in the prices of all the products, including those coming from a husbandry system orientated towards improving the animals' quality of life.

Thursday, 26 January 2017/ MAPAMA/ Spain.
http://www.mapama.gob.es

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