BERLIN, July 15 (Xinhua) -- Around two-thirds of the German associations of small and medium-sized enterprises (SME) negatively assessed the temporary reduction of value-added tax (VAT) in Germany and complained about additional work and costs, according to a member survey by umbrella association (ZGV) published on Wednesday.
Only 17 percent of member associations in the German SME sector expected a positive effect and economic stimulus from the VAT reduction from 19 to 16 percent, according to the survey.
"The VAT cut is well-intentioned but poorly implemented," said Ludwig Veltmann, managing director of ZGV. The "extremely short time available for implementation" had resulted in a high administrative burden for SMEs. Stationary retailers, for example, had to change their pricing and cash register systems.
The majority of members also expected additional efforts and costs at the beginning of next year, when the temporary VAT reduction in Germany would run out, the survey found.
"The competitive disadvantage towards online trade is thus threatening to become even more intense in many sectors" in Germany, warned Veltmann.
The COVID-19 pandemic had already caused declining revenues in the second quarter (Q2) of 2020. According to the ZGV survey, almost 60 percent of its members had reported falling revenues.
However, German SMEs are becoming more confident about the future. Around 42 percent expected stable or even rising revenues in the coming months, according to the survey. In the first quarter, this figure had only been 18 percent.
Last week, the German government launched an aid program for SMEs to mitigate the economic effects of the COVID-19 crisis. For the three summer months until August, German SMEs could receive up to 150,000 euros (171,452 U.S. dollars) to cover fixed costs. Enditem
