Saturday 19 August 2017

The danger of a VAT increase

The words of an anonymous Greek philosopher, that those whom the gods wish to destroy they first make mad, could easily be applied to the Government's plans to raise the main VAT rate by 2pc to 23pc in next month's Budget.

At a time when consumers are absolutely terrified to spend a cent, retail sales have fallen by a quarter from their 2007 peak and the North is now less than two hours' drive away for most of us, the notion that raising the VAT rate to 23pc would somehow miraculously produce several hundred million of extra revenue for the exchequer strikes one as being utterly delusional.

We have only to look at what happened the last time the government attempted to put up the VAT rate, when the late Brian Lenihan raised it by 0.5pc in his October 2008 Budget.

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