Lowering VAT would boost economy, says EU report (24/2/09)
February 24, 2009 at 6:40 pm Leave a comment
Reducing VAT to five per cent would help promote jobs and combat the black economy, according to a new report out in Brussels. The study outlines the proven benefits of a low VAT rate in countries where it has been applied to a range of goods and services including restaurants, children’s car seats, home renovations, shoe repairs, hairdressing and beauty treatments.
MEPs at the European Parliament have overwhelmingly endorsed the report and are calling on member states to back it also. Labour MEP Proinsias de Rossa says it would be ‘irresponsible’ of the Irish government to block the proposal, which requires the unanimous agreement of every EU country before it can be made law.
‘In Ireland we face the prospect of some 400,000 unemployed people, many of them in the services sector. If our government claims that its objective is “jobs, jobs, jobs”, then it must accept the five per cent VAT rate to help tackle the jobs crisis,’ said the Labour MEP.
Ireland’s VAT rate on labour-intensive services currently stands at 12.5 per cent. The report shows that a lower VAT rate encourages employment in services, helps small and medium-sized businesses, makes the black market less attractive and also benefits care services for children and the elderly.
Entry filed under: Business and the EU, Consumers and the EU, Economy and the EU, Recession and the EU. Tags: .
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