Germany’s Pandemic Tax Plan Could Boost Consumer Spending

Germany’s series of tax cuts announced this week are likely to boost consumer spending and improve margins for businesses suffering losses in the coronavirus pandemic, tax practitioners and industry groups said.

The measures, announced June 3 as part of a 130 billion euro ($147 billion) stimulus plan, include a temporary decrease in the standard value-added tax rate to 16% from 19% and a reduced VAT rate of 5%, from 7%, for essential items such as groceries. The changes will take effect from July until January 2021.

“Everyone was really surprised by the size and nature of the measures included,” ...