Tuesday, July 8, 2008

The elephant reappears

There has been a good deal of fuss about campaigns to lower VAT on various parts of the British economy that may be suffering from it. The TaxPayers' Alliance, for one, became involved in a Cut the VAT Campaign. To be fair, they seem to understand that the British Government is in no position to cut the VAT and the House of Commons has no control over this tax, having abandoned its right to control taxation, won centuries ago by their predecessors.

Never mind, the real government has stepped in:
The European Commission has opted to allow reduced sales tax for housing, local restaurants and some small services in a move welcomed by France but poised to spark opposition in other countries, mainly Germany.

The proposal, unveiled by EU tax commissioner Laszlo Kovacs on Monday (7 July), enables the bloc's member states to apply lower VAT rates for some specific sectors on a permanent basis.
How very kind of them. This does not mean any country can abolish VAT or introduce competitive local tax or, even reduce VAT to the minimum level on other goods and services. We are merely allowed to be a little flexible as instructed by the European Commission.

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