Taxes risk going up in the mid-term budget if there is a revenue gap due to additional zero-rated VAT items.
Fin24 states “It could be a concern. VAT was raised to close the budget deficit. Now we’re going the other way, so the hole won’t be plugged.”
Next years mid-term budget will further include details on how to fill the revenue gap. A possible fix to this could be that they will not allow all six items to be zero-rated. The question however is how they will choose which items are needed most. Bread and flour are important items but so are items that will get children through school such as uniforms and sanitary products. The prices of nappies are also unaffordable to the poor and by lowering the price it could make a big difference.
An important question is, by what margin will the tax go up if all items are zero-rated?
AW would like to know what you think of these zero-rated products and whether you think it should be implemented despite the possibility of tax increasing?