Over the last day or two, chatter has started up in Germany over this change (temporary) of the VAT (Value Added Tax), from 19-percent to 16-percent.
HR (regional public TV for Hessen) did a bit of coverage over it and it's worth a review.
By their assessment...a family of four would retain over an entire month, about fifty Euro.
The bureaucratic nature of this temp-change? That got brought up. A lot of grocery operations will receive a pre-marked item with cost and they can't immediately offer up the change. They can do some things at the cash register as you check out.
People being skeptics of this being a 'great deal'? Well....you basically have six months of this, and in January...the 19-percent VAT will return. If you figure the monthly amount, it'll amount to 300 Euro in your pocket at the end of the year. For the poverty-class (Hartz IV welfare group), it's positive. For the upper-level working class of people, it won't be that big of a deal.
I brought this up with the German wife....she's got this 4,000 Euro window replacement job for the 2nd half of the year for the house. For her, she'll save around 120 Euro. It's a nickel-and-dime savings but it goes back into her pocket.
If I were interested in buying a new 1k Euro TV by Christmas? That's another thirty Euro in the pocket.
I'm more of skeptic in this really changing the attitude of people to go out and buy something. Now, if you'd said that anything you bought over 2k Euro was reduced by 9-points on VAT, for a six-month period, then I'd probably go and find five or six things in the house or on the property to renovate. A lot of people would be thinking of ways to spend money. Three percent off, just doesn't achieve that much in the end.
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