The German Government's intention to increase VAT on flowers and ornamental plants from 7% to 16% is being fiercely opposed by the sector. Government Deputies have been invited visit production units, garden Centres and florists throughout the Country in an attempt to convince them of the severe damage that would result. The uncertainty itself of just when these new tax rates will be introduced is itself causing considerable damage to the industry. Formerly, the date for introducing the higher rate was to be 2004, now it is 2005! The proposed increase in VAT will lead to bankruptcies and unemployment and the German Garden Centre Association, estimates that if the new rate is introduced the Garden Centre Industry will loose at least 40.000 jobs. Alarm is also being expressed in Holland and Belgium on the understanding that if the rate is increased in Germany it will create a domino effect in other countries with a low VAT rate. ZVG (Zentralverband Gartenbau e V.). E-mail: zvg-report@g-net.de www.g-net.de