I see that EU Finance Ministers failed to agree measures to cut VAT on a range of services at a meeting today. Inflation and prices are rising across the EU and jobs and spending are under pressure, so obviously some members states see a VAT or sales tax cut as one way to cut prices and stimulate spending and job creation. As we know from the recent Lisbon Treaty debate any change would require unanimity.
Fox News Analyst agrees with Gas Tax Proposal...must be good then!!
I think it would be worth exploring the possibility of a VAT tax holiday on electricity costs, basically a decision to reduce or abolish VAT for perhaps a year in the hope that electricity costs come down. This is akin to the gas tax holiday proposed in the US. The benefits of a VAT holiday is that it is a short term measure designed to ease the pain now, leaving the option open to Government to reintroduce VAT when hopefully the price of electricity comes down as global oil prices come down. This measure could save the average household about €100 annually. This is not as complicated as a general VAT reduction in that there is only one supplier (ESB) which is state owned and as I outlined the consumer would definitely see the benefit as the price of electricity is set and outlined clearly on every bill. What do you think?