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Ireland is to increase its standard VAT rate from 21% to 21.5% from 1 December 2008, announced the Minister of Finance during the country's annual budget, which took place on 15 October.
Kieran Desmond, managing director of TMF Ireland accounting services said: 'This change is part of Wednesday's budget, which brought in budgetary cuts to deal with a severe fiscal shortfall. The Government is blaming the recession. The VAT increase is to be accompanied by other direct tax increases'.
Richard Asquith, head of TMF VAT global compliance services suggested that the increase was 'part of the international VAT trend to shift the tax burden away from business taxes onto indirect taxes. This is regarded as key for countries seeking to attract foreign direct investment and remain globally competitive'.
He suggested that other countries might follow Ireland's lead.
