# New study shows COVID value-added tax cut significantly boosted private consumption

Source: [Science News - Mathematics, Economics, Archaeology, Fossils](https://phys.org/news/2026-11-covid-added-tax-significantly-boosted.html) · 2026-11-11 · Life
Page: https://themorning.science/story/new-study-shows-covid-value-added-tax-cut-significantly-boosted-private-consumpt-7364d51b4a9ce7d6
Kind: research · Impact: low

## In brief

- In summer 2020 Germany cut its value-added tax from 19% to 16% for half a year as part of its COVID stimulus package.
- A new study in the Review of Economic Studies uses survey data and retail purchase data to assess the effect on private consumption.
- The study reports that the VAT cut significantly boosted private consumption.

## Why it matters

The study provides empirical evidence on how a temporary consumption tax cut affects household spending, which is relevant to economists and policymakers evaluating fiscal stimulus.

## Timeline

- 2020-07-01: German federal government lowered value-added tax from 19% to 16% for half a year as part of COVID stimulus package
- 2026-11-11: Study on the VAT cut's effect on private consumption reported as recently published in Review of Economic Studies

## Coverage

- [New study shows COVID value-added tax cut significantly boosted private consumption](https://phys.org/news/2026-11-covid-added-tax-significantly-boosted.html) — Science News - Mathematics, Economics, Archaeology, Fossils, 2026-11-11

Tags: economics, fiscal policy, consumption, vat, germany

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