- Raising VAT rates could help fill the budget gap and support economic growth.
- A 2.5 percentage point increase in VAT is suggested as a viable option for revenue without harming growth.
- Other tax options like inheritance and wealth taxes may not generate substantial revenue.
- VAT currently accounts for about 17 percent of UK tax revenue, and an increase could raise approximately £21 billion annually.
- VAT has limited negative impact on growth compared to income taxes.
- VAT can be progressive, benefiting public services that disproportionately aid the poor.
Source: theguardian.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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