cut VAT to 15% to provide a fiscal stimulus
We, the undersigned, petition the Prime Minister to cut VAT to 15% to provide a fiscal stimulus
Consumer spending is a crucial part of our economy, and has been the driving force behind growth in recent years. VAT is a taxation on this. Cutting VAT would encourage the consumer — unlike other tax cuts which can just be put into savings, and which are less likely to help fight the downturn. VAT effects the poorest more than the richest, and so the tax cut will particularly benefit those on low incomes. Yet it is a very simple and clear tax cut for all — which means it is much more likely to boost public confidence than a more complex tax initiative. The cost of a cut to 15% VAT is within the £20 billion the government is likely to want to put into a fiscal stimulus, and is within EU rules on VAT. The Centre for Economics and Business Research also supports a VAT cut to 12.5%.
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