Study of the implementation of a coffee tax exemption for sustainable coffee

The Federal Republic of Germany supports the Agenda 2030 for Sustainable Development of the United Nations. Fostering sustainable global supply chains forms an important part of the goals of the Federal Ministry for Economic Cooperation and Development (BMZ) in development cooperation.
In April 2018, the BMZ publicly demanded a tax exemption of sustainably produced and fairly traded coffee in order to improve social and ecological production conditions in coffee exporting countries. The "Deutsche Gesellschaft für internationale Zusammenarbeit" (GIZ) advises the BMZ within the scope of the program "sustainable supply chains and standards" and commissioned the InGFA to provide expertise from an administrative sciences perspective.

In the study an implementation system will be developed. The system firstly ensures and controls that the requirements for a coffee tax exemption are met, and secondly allows to administer the exemption process efficiently and effectively. To devise such a system, the existing coffee tax and its implementation system will be portrayed. Next, the requirements for a possible coffee tax exemption will be summarized. Successively, other regulatory systems for the assessment of government-determined, sustainable production criteria will be analyzed comparatively. Subsequently, an implementation system for control and exemption will be devised and resulting administrative processes will be modeled. Finally, a cost estimation will be conducted concerning the ensuing costs as well as the expected tax deficit caused by the exemption.