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Governments around the world are increasingly turning to indirect taxation to stimulate their economies, according to EY.
A new report from the accountancy giant shows that the rates of VAT and similar sales taxes have risen year-on-year in the aftermath of the global financial crisis. The average standard rate has climbed in EU member states from 19.5% in 2008 to a high of 21.6%, with even low-rate countries like Luxembourg upping their base.
Governments around the world are increasingly turning to indirect taxation to stimulate their economies, according to EY.
A new report from the accountancy giant shows that the rates of VAT and similar sales taxes have risen year-on-year in the aftermath of the global financial crisis. The average standard rate has climbed in EU member states from 19.5% in 2008 to a high of 21.6%, with even low-rate countries like Luxembourg upping their base.
The propensity for VAT and its counterparts is accompanied by the introduction of excise duties on unhealthy food. Taxes linked to wellbeing could become more prevalent as governments’ spending in ther area accelerates and populations age, while rates continue to rise on traditional duties, including those on tobacco and alcohol, notes the report, Indirect Tax in 2015.
It also addresses the impact of e-commerce; in particular, recent EU rules that require foreign providers to pay VAT on digital transactions in consumers’ home jurisdictions.
