European Commission plugs new VAT rates

A NEW VAT (Value Added Tax) system that would make it easier for business, less costly for government and reduce the multi-billion euro VAT fraud is being touted by the European Commission.

But it could spell the end of special VAT rates such as Ireland’s no VAT on children’s shoes, or France’s reduced rates for restaurants.

The tax on services and goods every consumer pays accounts for more than one fifth of the state’s revenues, but it will become an even more important source of funds in the future with an aging population not contributing as much in income tax, according to EU studies.