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Recent VAT changes: who gained? who lost?

Recent VAT changes: who gained? who lost?

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Author

Micheál Collins

Summary

Across the EU changes to indirect taxes, and particularly VAT, have been a central part of countries response to the economic crisis. By mid-2014, 22 of the 28 EU member states had increased VAT rates since the onset of the economic crisis in 2008.

Over that period VAT rates have featured as an area of change in a number of Republic of Ireland budgets. This inBrief, profiles the distributive effects of the two most recent changes to these rates, introduced as part of the international bailout programme agreed by the Irish Government and the Troika. These saw:

(i)  The temporary introduction, and subsequent retention, of a second reduced rate of VAT for specific items related to the tourism sector (where the rate decreased from 13.5% to 9%);

(ii)  An increase in the standard rate of VAT from 21% to 23%.

This Research inBrief is a summary an NERI Working Paper (2014/19) - available here

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