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EU to lower VAT?

Banking

The European Commission may ease on its stance regarding VAT. Decrease in minimal product and service taxes may have a beneficial effect on consumption, and fights black economy as well. 

A French proposition would decrease VAT payable at restaurants from the obligatory minimum of 19.6% to 5.5%, but changes in tax regulations can only be passed if approved by all member states. According to Le Monde\'s information the European Commission is open to discuss a study published by independent organization Copenhagen Economics. In their research, they investigated the relation of decreasing taxes and job creation. In some, “well-chosen” industries this move is predicted to be successful. There is talk about creating three VAT categories: nearly 0% for basic products and services, a 10-12% rate for certain selected services (such as restaurants), and a normal rate for everything else.

Presently VAT in EU varies from 15% to 25%, with a limited scope of special products and services enjoying reduced rates (minimum 5%). This group of products and services were compiled in 1992, and include 18 items. Differences in the tax systems of member states are being gradually eliminated. (Gazdasági Rádió)

 

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