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7% for Kids – Reduction of taxes on children’s products

7% for kids

 

[17. 5. 2011] Family organizations and companies call for a reduction of VAT on typical products and services for children. Campaign start in front of the Brandenburg Gate with people forming a human Seven.

 

It’s just the beginning: Parents and children formed a huge Seven in front of Brandenburg Gate in Berlin today, They claim: The reduced VAT rate has to be applied on products and services for children”. “ This would be a strong sign of a forward-looking family policy and a clear commitment to families”, says Sven Iversen, director of the Association of German Family Organisations (AGF). Bettina Peetz, Manager of the German retailer for children’s fashion, toys and accessories, JAKO-O, adds: “ Families make a substantial contribution to society’s development , because it’s our children who’ll shape the future. Their good and healthy growth is a common task.“
In cooperation with other stakeholders from the social and business sectors AGF and JAKO-O have formed the alliance “7 % for Kids”. The Partners conjointly advocate the improvement of the basic conditions for families in Germany by launching the public campaign “7% for Kids” on the occasion of German Federal Government’s plans to reform the VAT system. A Government commission is to develop proposals concerning such a reform in the course of this year.

 

Illogical and unfair: German VAT
“Children’s clothes and shoes, diapers, baby car seats, school lunches – all this is still charged with 19 per cent. Politicians failed to take children’s needs seriously, This has to change now!”, criticizes Iversen. “A lot of branches of trade and products are supported by a reduction of VAT to 7 per cent – families aren’t.”

 

Up to 950 millions more in the families’ budget – “Mehrwert gerecht steuern” (engl.: fair management of the added value)
According to German market research company GfK (Gesellschaft für Konsumforschung) the 35,1 million private households in Germany spent  7,5 billion Euro altogether in 2010 on children’s clothes, shoes, baby articles and toys. This sum includes 1,2 billion Euro VAT, which’s rate is 19 per cen for the mentioned products. If it was 7 per cent, families would have had 950 million Euro more in their purse. AGF calculated, that a VAT reduction would lead to savings of 200 Euro when buying baby’s basic equipment, 40 Euro when school starts and 15 to 30 Cent per lunch at school.
E-mail-campaign – VAT reduction on trial at JAKO-O.


Within the initiative “Mehrwert gerecht steuern – 7 % for Kids” there are several activities planned in order to increase the pressure on the policy-makers. This includes poster advertising on busses and in central underground stations in Berlin-Mitte as well as a survey among all Members of the Bundestag and an online collection of signatures: “We call upon all parents to point out to the minister of finance and other politicians how important a family-friendly tax system is for the future of our society”, explains Bettina Peetz. Central information platforms will be the campaign’s website www.7fuerkinder.de and its presence on facebook. It is here, where the results of the aforementioned survey will be presented. From 17 to 31 May customers of JAKO-O will be able to try out how much a VAT reduction on children’s products would lower their expenses. The mail order company for children’s products then grants a discount of 12 per cent on nearly the whole range of goods.