- Many countries reduced excise duties and value-added taxes on energy and food products temporarily to support prices and mitigate the impact of rising energy prices and inflation.
- However, the effectiveness of reduced VAT rates in achieving policy goals is questionable.
- Most European countries have already ended their temporary reductions, with Belgium being the only country to permanently reduce VAT on gas and electricity.
- Some countries extended reduced rates for restaurants, catering, and cultural activities, while others lowered VAT rates for specific goods such as zero-emissions cars, feminine hygiene products, and children’s hygiene products.
- Luxembourg and Estonia also implemented VAT rate reductions to encourage consumption.
Source Tax Foundation
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