Economy & Politics

Civey survey: VAT cut leaves consumers unaffected

The reduced VAT rates have been in effect for three months. But they hardly encourage consumers to consume more
The reduced VAT rates have been in effect for three months. But they hardly encourage consumers to consume moreimago images / Ralph Peters

Half-time for the VAT cut: The reduced tax rates of 16 and 5 percent, which were part of the federal government’s 130 billion economic stimulus package, have been in effect for three months. The majority of consumers take into account the measure, which will apply until the end of the year, but hardly when shopping. This emerges from the latest data from the consumption barometer that the survey institute Civey created for

The tax cut should make major purchases particularly lucrative – if they are passed on to customers. However, the hope that consumers would therefore prefer more expensive purchases has not yet been fulfilled: only slightly more than one in ten of the around 5000 respondents are considering a larger purchase due to the reduction in VAT. Almost half of them strongly reject this idea. Only among the 30 to 39 year olds can one in five imagine using the VAT reduction for an unplanned major purchase.

In the supermarket, the reluctance is even greater: Around nine out of ten respondents said they would not put more groceries and everyday items in the shopping cart because of the lower VAT. The measure still has the greatest impact on 18 to 29 year olds. Around 7.6 percent say they buy more, which is more than twice as much as in the other age groups.

Almost half postpone travel in 2020

Overall, the majority of respondents are sticking to their purchasing behavior from the time before the pandemic. Around half say they still buy as many products as before. Only a little more than one in five can be deterred from the risk of infection with the coronavirus or the limited convenience when shopping with a mouth and nose mask. The uncertain future prospects are also a problem for around one in ten people, although only three percent of those surveyed feel fear of losing their jobs.

In contrast, the pandemic is more noticeable when it comes to spending on leisure activities. Only a little more than one in four plans to continue spending money on theater or concert visits this year. In cities, it is at least one in three, given the greater cultural offering. A similar picture emerges when visiting restaurants. Around two thirds of those surveyed say they would spend less money on food.

The situation is less clear when it comes to vacation: the majority of those surveyed admittedly have postponed a trip to the coming year because of the pandemic. Around 47 percent, or more than four in ten survey participants, stick to their travel plans. This is especially true for households with children and for respondents between the ages of 18 and 29. Pensioners, executives and civil servants, on the other hand, have relied more heavily on new travel plans.

For the consumption barometer, Civey evaluated the answers of around 5000 respondents from August 21, 2020 to September 29, 2020.

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