EU Interest rates and VAT

tenchi-fan

I'm absolutely sickened by the mess Ireland is in. I know it's our own fault for allowing and continuing to allow such a crazy system of government to have so much power.

My issue this time is with rising interest rates which supposedly are to tackle inflation in the EU.

If France and Germany are so worried about their economies overheating they should increase VAT to 21% in line with Ireland. With regard to France, minor property extensions are only liable to VAT at 4.8%. Restaurants 5.5%. VAT on newspapers is 2.1% compared to our 9%. Petrol and diesel is 4c a litre cheaper. There is also plenty of room for an increase in duties on wine.

FRANCE
Duties 5-17%
VAT 5.5, 19.6%
materials and labour costs for renovations or minor property extensions is taxed at 5.5% instead of 19.6%

GERMANY
Duties 5-17%
VAT 7, 19%

IRELAND
Duties 5-20%
VAT 21% (possibly increasing to 23% under the EU/IMF deal)

Victor

They also need to be cautious of the effect of increases in such indirect taxes on inflation, so that won't necessarily work.

SBWife

An increase in VAT would fuel inflation. Inflation is measured by changes in the consumer price index, if you increase VAT prices increase. So what you are suggesting would lead the ECB to increase interest rates faster.:rolleyes:

Owldshtok

The Irish Government should decrease VAT on sales to the minimum allowed by EU law to 15% to allow a better chance for money to circulate in the economy,the increased circulation and spending would offset the reduction in returns.

It would generate business from north of the border and increase competitiveness for any Irish internet consumer sales into the EU

The recently reduced VAT for tourism related business to 9% should be reduced to 0% for a trial period.

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tenchi-fan wrote: »

I'm absolutely sickened by the mess Ireland is in. I know it's our own fault for allowing and continuing to allow such a crazy system of government to have so much power.

My issue this time is with rising interest rates which supposedly are to tackle inflation in the EU.

If France and Germany are so worried about their economies overheating they should increase VAT to 21% in line with Ireland. With regard to France, minor property extensions are only liable to VAT at 4.8%. Restaurants 5.5%. VAT on newspapers is 2.1% compared to our 9%. Petrol and diesel is 4c a litre cheaper. There is also plenty of room for an increase in duties on wine.

Have you forgotten about the reduced rate of VAT that also applies here? It is 13.5% (with various exceptions to it).

Our VAT rates are where they are because we - by which I mean our democratically elected governments as chosen by us - opted for higher VAT rates and lower income tax levels. We could have gone with lower VAT rates and higher income tax, of course, but high income taxes aren't popular with our decision makers as they tend to have high incomes (and the electorate seem to largely agree with them).