Sunday August 9, 2020

Brian Keegan: The €440m cost of Vat cut might have been put to better use

Consumers may not notice the Vat rate cut of 2% on everyday expenditure even if it is passed on to them

2nd August, 2020
In 2019, more than €15 billion was collected in net Vat receipts which is more than one quarter of the total tax receipts for that year,

Increases in Vat usually hit the sweet spot of tax policy – the extraction of the largest amount of money with the least amount of complaint.

Compared with an income tax increase, the general population rarely gripes about increases in Vat rates. Hiking the standard rate of Vat of 21 per cent to 23 per cent in 2012 generated hardly any noise, compared to the introduction of USC and the reduction of allowances and credits...

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