Noonan’s VAT hike admission under fire

THE €670 million sum which the Government believes can be raised through a VAT hike does not take into account the fact that it might prompt people to spend less.

Finance Minister Michael Noonan has already confirmed he intends to increase the standard rate of VAT by two points to 23% in the December Budget, and says the move will raise an estimated €670m a year.

But he has now admitted that the estimate “does not take into account any behavioural change on the part of taxpayers as a consequence of such a measure”.