Greens to reduce VAT

[doppellanger]

About time someone thought of this - although a 1% decrease might not make much of a difference on inflation, at least it is a step in the right direction.

[Now You're Hurling]

About time someone thought of this - although a 1% decrease might not make much of a difference on inflation, at least it is a step in the right direction.

The VAT rate was reduced to 20% about 6-7 years ago, and was raised again a year or two later because the decrease wasn't being passed on to consumers. If you are going to reduce it, you will have to do it by a few percent at least so that the consumer will be able to see the difference. This would lessen the likelihood of retailers just pocketing the difference themselves, which is what happened the last time.

[doppellanger]

The VAT rate was reduced to 20% about 6-7 years ago, and was raised again a year or two later because the decrease wasn't being passed on to consumers. If you are going to reduce it, you will have to do it by a few percent at least so that the consumer will be able to see the difference. This would lessen the likelihood of retailers just pocketing the difference themselves, which is what happened the last time.

I think it was longer ago than that, I think it was tried in the 90s but I'm open to correction.

I'd agree, 2% decrease would have been better. But the large retailers like Tesco, Aldi, Lidl are more competitive on price than supermarkets were a few years ago.

It should still put a damper on inflation, as retailers/service providers will be slower to raise prices if they have an extra percent in profit margin.