Germany’s parliament voted on Thursday to slash value-added tax on restaurant meals by more than half for a year to help them recoup devastating losses caused by the lockdown and social distancing introduced to slow the spread of the coronavirus.

The measure, passed in parliament by a wide majority on Thursday (28 May), cuts the sales tax restaurant guests pay on food to 7% from 19%.

The hospitality trade has been among the worst-hit of all sectors of the economy by the restrictions that were imposed in March to help prevent the pandemic overwhelming Germany’s healthcare system.

Restaurants have re-opened to eat-in guests, though rules requiring a minimum distance between tables continue to weigh on profits in the sector. Industry associations warn that swathes of businesses in the sector are on the brink of bankruptcy.

Finance Minister Olaf Scholz’s Social Democrats has promised to further support the gastronomy sector in an impending economic stimulus package.

On the news NFFF President Andrew Crook commented “The fish and chip industry would welcome a move like this, Germany already had a reduced vat rate of 7% for takeaway food which obviously recognises the unfair burden a high VAT rate places on hot food businesses.

It’s good to see the German government has seen that reducing VAT on restaurant meals help massively to get restaurants through this very difficult period and will result in seeing growth and  business  continue to employ.”