UNDERSTANDING THE VAT INCREASE…
The Government projections for additional revenue from the Vat increase are already in doubt and finance minister Michael Noonan has admitted as much, according to The Sunday Independent.
The minister said the €670m forecast makes no provision for any income lost from the public’s decision or ability to spend less or to go to the North for their shopping. The newspaper points out that based on historical experience, it would be unprecedented if spending patterns remained unchanged after an increase in Vat.
In answer to a question in the Dáil from Fianna Fail’s finance spokesman Michael McGrath, Noonan admitted the €670m estimate “does not take into account any behavioural change on the part of taxpayers as a consequence of such a measure”.
McGrath described the admission as “quite incredible”.
Indeed it is.