this post was submitted on 17 Aug 2023
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Why shouldn't it include VAT?
Because this tax goes straight back to the government. It buys weapons systems for a certain price, pays 19% VAT on top of it - back to itself.
So this means that the money which the ministry of defense was granted by the ministry of finance is just 84 billion plus an additional 16 billion (19% VAT) which will go straight back to the ministry of finance and can not be used to procure anything. A "true" 100 billion budget would have meant either a suspension of VAT on all payments or 119 billion provided by the ministry of finance, of which 100 billion can be used to buy systems and 19 billion would go back to the government as VAT.
because if the government spends 100€ on whatever, it gets 19€ back.
So it only actually spent 81€.
Careful: VAT is calculated additionally to the price of the goods bought. So when the government buys goods for 84€, an additional +19% VAT is slapped on top of it, which comes out to 16€, for a final payment of 100€. So only when the government ultimately pays 119€ on something, it gets 19€ back.