Cut in spending better than VAT hike, reports specialist

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Cut in spending better than VAT hike, reports specialist

Thu 5th Nov 2009

Bridging the gap in VAT would be better achieved through cutting spending rather than a tax hike, the Taxpayer's Alliance has claimed.

Matthew Sinclair, research director at the independent alliance for lower taxes, called VAT a "stealth tax" which is increasingly being placed on consumers most important purchases.

He said increasing the amount people pay will not be the best way to close the government's £26,976 million tax gap.

Instead, he believes that cutting spending is the key, as Britain is one of the largest global spenders, which leads to great waste.

Mr Sinclair said: "We think there needs to be serious cuts in spending so that the burden on taxpayers can be brought down".

Despite the cut in VAT to 15 per cent last November, Mr Sinclair feels that the charge is too high. The current figure is set to return to its original rate of 17.5 per cent on 1st January 2010.

His comments follow a report by the European Commission which said that more should be done by individual countries to tackle their VAT tax fraud problems.

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