German transport minister considers cutting VAT on train tickets

German transport minister Andreas Scheuer intends to cut the value added tax (VAT) on long-distance train tickets in a bid to make railroad travel more attractive and reduce carbon emissions in the country’s transport sector. In an interview with the tabloid Bild Zeitung, Scheuer said the government aims to increase the number of train travellers to 150 million per year. “To achieve this and make trains more attractive, we need to reduce the VAT on tickets from 19 to 7 percent on long-distance trains,” he said. According to the newspaper, this would reduce the price of a train ticket from Berlin to Munich from 153 euros to about 129 euros, saving customers around 24 euros per ride. “If we are serious about climate action and want people to swap cars and airplanes for trains, we need to begin with taxation,” Scheuer argued.
Rail transport group Allianz pro Schiene welcomed Scheuer’s proposal, calling it “an important signal for greater climate action in the transport sector” that both short and long distance rail travel are taxed at 7 percent VAT. The pro-rail alliance said the minister is adopting an important idea of Germany’s transport commission, adding that it’s crucial not to disadvantage train tickets vis-à-vis airplane tickets, which in the case of international connections are currently not taxed at all.

Reducing emissions in the transport sector has proven particularly difficult for Germany, where the carbon footprint of cars, planes and other means of transportation has  remained largely stagnant since 1990. The national transport commission was tasked with proposing ways to bring down the sector’s greenhouse gas output. But Scheuer has been criticised for failing to fully support the body’s work, and after months of controversial negotiations, the commission’s proposal, released in late March, does not contain sufficient measures to reach Germany’s transport emissions reduction targets.